Do You Need Life Insurance

Very few people rush out to buy life insurance – it’s hardly an enjoyable purchase and nobody really wants to think about their own critical illness or death. But a decent life policy is an essential for people with dependents and other responsibilities. So, do you need life insurance? Are you looking for information on the differences of life insurance and life assurance?

What is Life Insurance?

Life insurance is a contract between you and an insurer. It could pay out a cash sum if the worst happens during the length of the policy. Ensuring that your dependants can pay bills that they may of otherwise not been able to pay. Life Insurance began as a way of reducing the risk to traders, as early as 2000 BC in China and 1750 BC in Babylon. An early form of life insurance dates to Ancient Rome; “burial clubs” covered the cost of members’ funeral expenses and assisted survivors financially.

Do You Need Life Insurance?

When it comes to deciding if you need life insurance you need to think about the things you currently pay for and who you support – even in the smallest way. What would you be leaving behind? Also remember that life insurance isn’t just in the event of your death – it also covers you if you become permanently disabled, or suffer a debilitating illness and can no longer work.

Who Needs Life Insurance?

Sole Breadwinner

Life insurance pays out a lump sum on death. It is therefore a necessity if you have a partner or have children who rely on your earnings.

For example, if you are the sole breadwinner of the family, without life insurance your loved ones might not be able to pay the mortgage, rent or other day-to-day expenses if you were to die. So if you are the only one earning money for your family, you definitely need life insurance.

Dual Earners

What if you and your partner are both currently employed? You might not think you need life insurance if you are both earners. Surely your partner could manage on his or her own salary after your death?

But would one income be enough to support the household? It’s highly unlikely the bills would change in price or quantity with the loss of the deceased persons income, so joint life insurance is crucial if your partner would not be able to pay all the bills alone.

Stay-at-Home Parents

Do you need life insurance if you are not making an income? Life insurance is important even if you are a stay-at-home parent who does not bring an income into the house.

You might not bring in any money, but your death could still have a financial impact on the family. Who would care for the children if you were not around? Assuming your partner could not afford to give up work, could he or she afford to pay for a child minder, and for someone to do the household chores? The answer is probably not. So life insurance for a stay-at-home parent is a very good idea.

Top-up Your Cover

Do you need life insurance if you have purchased life insurance previously? If you have already purchased life insurance, it’s worth checking it’s up to date. You might have arranged the policy several years ago, perhaps when you had a smaller house and fewer children. You would therefore need to top up the cover to make sure it meets your current needs and would be able to support all your dependants.

Single People

Do you need life insurance if you have no dependants? Of course, there are many people who don’t need life insurance. If you are single and have no dependants, it’s probably an unnecessary purchase.

Similarly, if you are elderly and your children have long left home, you might not want to pay for for life insurance premiums. However, some people take out life insurance to pay their funeral costs, or to pay an inheritance tax bill, so it’s often worth seeking advice.  AFP Partnership can advise you on suitable insurance policies, to arrange an appointment please contact us on 01743 364377 or send us an email.

Children

Do children need life insurance? Children do not really need life insurance. Yes, there have been cases where life insurance for one’s child has been a blessing, but in the majority of cases, children do not need life insurance since no one depends on income from them.

Elderly

Do elderly people need life insurance? As long as you do not have people depending on your income for support, life insurance at this stage in life is not necessary, unless again, you do not have any other means to pay for your funeral expenses. But, be aware that purchasing a life insurance policy at this age can be very costly. Before doing so, first talk to a financial advisor or accountant about looking into other saving options to pay for your funeral costs before considering life insurance.

Business Needs

Do you need life insurance if you own a business? If you are the sole owner of a business, how much money will it need when you die? Do not expect that some of your inheritors will continue the business, because without life insurance they may not have the funds to continue the business. You may need insurance proceeds to cover any cash flow shortage of the business to save it going bankrupt.

AFP Partnership Shrewsbury

It is important to have the correct Insurance & protection products in place to protect your Home, Family, Income & Lifestyle if the worst should happen.

AFP Partnership are Mortgage and Insurance Advisers in Shrewsbury

At AFP Partnership Shrewsbury, we deal with some of the country’s top insurers and will take the time to discuss what you are looking to achieve from your life insurance as well as recommending the most cost effective and secure solutions we possibly can, in order to protect your family, your home, your lifestyle and your assets. So if you would like to arrange a meeting with our Shrewsbury based office then come visit us!

It may be that you already have arrangements in place but wish to ensure that they will do the job required should the worst happen, or you may wish to take advice to set up new arrangements.

Either way, speak to one of our qualified advisers on the number below or visit our office in Shrewsbury.

Call us now on 01743 364377 and we’ll be happy to help.

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