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Life insurance is often something people think about but delay arranging, assuming it’s only necessary later in life.
The reality is that the right time to get cover depends on your circumstances, financial responsibilities, and long-term plans.
A well-structured policy can provide peace of mind and financial stability for those closest to you if the unexpected happens.
Getting Life Insurance When Buying a Home
One of the most common times people take out life insurance is when they buy a home.
A mortgage is a long-term financial commitment, and without cover in place, your loved ones could struggle to maintain repayments if something happened to you.
While lenders don’t require life insurance as part of a mortgage agreement, it’s often recommended to ensure financial protection for your family.
Decreasing Term Life Insurance
This type of policy is often chosen by homeowners with a repayment mortgage.
The payout amount reduces over time, in line with your mortgage balance, ensuring that if you pass away before clearing the loan, the remaining debt is covered.
Level Term Life Insurance
With this policy, the payout remains fixed throughout the term. It’s a suitable option if you want to leave behind a specific lump sum for your family, rather than just covering outstanding mortgage payments.
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Life Insurance for Growing Families
For parents, life insurance offers a way to ensure dependants are financially supported in the event of their passing.
Everyday costs, education fees, and even future expenses such as university tuition or childcare could be covered by a payout.
Taking out a policy early can be beneficial, as younger applicants generally secure lower premiums.
Considerations for Parents:
- How much financial support would your family need?
- Would you want cover to last until your children reach financial independence?
- Do you want to add critical illness cover for additional protection?
Changing Jobs or Becoming Self-Employed
A career change can affect your financial security, especially if moving from a salaried position to self-employment.
Many employers offer life cover as part of workplace benefits, but these policies typically end when you leave the company.
If you’re self-employed or working in a role without these benefits, arranging your own policy ensures ongoing protection.
Why Self-Employed Individuals Should Consider Life Insurance:
- No employer-provided life cover means financial security depends entirely on personal policies.
- Income can be unpredictable, making financial protection even more important for dependants.
- Critical illness cover can provide additional security in case illness affects earning potential.
How Age and Health Affect Life Insurance Costs
The cost of life insurance depends on several factors, including age, health, and lifestyle.
Taking out a policy earlier in life often results in lower premiums, as younger individuals are generally seen as lower risk.
Factors That Can Influence Premiums:
- The younger you are when you take out cover, the lower your monthly premiums tend to be, whereas the opposite can be said if you’re older.
- Your medical history, including pre-existing conditions or a family history of certain illnesses could impact costs.
- Lifestyle choices, such as smoking, excessive alcohol consumption, and high-risk hobbies can increase premiums.
Even if you’re in good health now, securing a policy early means locking in lower rates, which could save money over the policy’s lifetime.
Planning for the Future
Even if you don’t have financial dependants, life insurance can still be valuable.
Some policies include additional benefits such as critical illness cover, which provides a payout if you’re diagnosed with a serious medical condition.
Having a policy in place can also prevent loved ones from dealing with financial burdens such as funeral costs or outstanding debts.
Finding the Right Cover
Choosing the right life insurance policy depends on your circumstances.
Whether you need cover to protect a mortgage, provide financial security for your family, or simply plan for the future, understanding your options is key.
If you’re unsure where to start, speaking with a protection advisor can help you explore policies that match your needs.
UK Moneyman has a team of experienced protection advisors who can provide personalised support to help you find the right cover for your situation.
