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Why Should You Have Life Insurance?

Updated on July 29, 2016
Life Insurance
Life Insurance | Source

Why should you have Life Insurance?

Why should you have Life Insurance? Nobody likes thinking about death. Sometimes, though, it’s important to know that things will carry on without you. A part of taking care of those you love is making sure that they will be okay, even after you’ve gone.

Most people don’t think about the financial costs of death. We might imagine our family struggling on a smaller income if we die whilst we’re working, but most people assume it’s free to die.

The Rising Cost Of A Funeral In The UK
The Rising Cost Of A Funeral In The UK

The average cost of a basic UK funeral is £3500 and rising. This doesn’t include a wake or a headstone, flowers or newspaper announcements. By 2029, this cost is expected to rise to over £10,000. Even if you just want to be cremated (by far the cheaper option) in a very simple ceremony, with your family taking care of your body at home, a simple coffin, and no music, wake, or flowers, you would still be looking at a price tag of £1500 at today’s prices.

There’s no question that these hidden costs of death are shocking, and prey on grieving relatives when they are most vulnerable. Having a plan in place to pay for your own funeral expenses can protect your family from having to find thousands of pounds whilst they’re struggling with the loss of you.

There are a few different ways to plan for your own funeral. You could get a pre-paid funeral plan, which you can either buy in a lump sum or pay for in installments over a few years.

Another way to prepare for death is to take out a life insurance policy. Policies can vary wildly - from Michael Winner promising you a free pen, to multimillion pound policies for wealthy business people - but everyday people have been using life insurance to cover their funeral costs since Roman times.

A practical life-insurance policy, tailored to your needs and supplied by a responsible company, can cover all your funeral costs and even leave your family with a monthly income to help them along after you’re gone. Premiums for good quality cover start at around £10/month for a whole of life policy (which is the kind of cover you’ll need to cover funeral costs), and will mean that your family is protected from hefty fees when you pass away.

Mortgage Protection
Mortgage Protection | Source

Another advantage of a life insurance policy is that you can choose to cover your mortgage in your policy, meaning that your house will be paid for when you die. Mortgage payments can take up to two thirds of a family’s income, so removing those costs can make a huge difference to how well you family will cope without your salary or income.

If you don’t have a mortgage, or if it is already paid off, you can also choose to leave a lump sum or monthly payments to your family to help them manage without you. Small monthly payments now can make a big difference later.

It’s never fun to think about what happens when you die, but you can make sure that your family are protected after you’re gone.

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