How to find the right life insurance cover for you

It may come as no surprise that the majority of mothers work. In fact, figures from the ONS show that in 40% of households, it is the woman who is the main breadwinner. But for the majority of women with kids, our income is typically lower than that of our husbands/partners, particularly where we’ve cut back our hours to provide childcare.

This means that should our partner suddenly die – which results in a loss of crucial income – there will be a huge financial gap to plug. What’s more, should I die at an early age, my husband would struggle to cope with covering my unpaid role within our household.

Parents depend on each other in all sorts of ways that go beyond paying the bills. In many cases, the surviving parent would have to leave their full-time job in order to care for the kids. Or if they choose to continue to work, my husband would have to pay someone to look after our daughter while he works 50-60 hours a week – and if there is one thing I am sure of, it’s that childcare doesn’t come cheap.

Yet, according to LV=, only a third of households have life insurance in place to help protect their dependents or partner, should they die.

No one likes to think about their own death. I mean, why would we? It feels morbid and a bit like tempting fate. The good thing is, that with most mortgages you are required to have this type of cover, but many people living in rented accommodation wrongly overlook this type of insurance.

No matter where you live, if you have children, life insurance is crucial. Especially when you consider the fact that one-in-20 children lose a parent before they are finished full-time education.

Now, while this seems rather depressing, unfortunately, it’s a grim reality. I’m a big believer that a parent’s responsibility continues even after death. But there are steps you can take to ensure you family is financially secure.

Many of us get some life insurance coverage through our employers, it is usually not enough to provide a safe future for our families.

Luckily it isn’t expensive to put this protection in place: monthly premiums are less than the cost of a cheap takeaway. At Beagle Street, for instance, you could get £200,000 worth of cover for under £6 a month. Plus, you can get your hands on a will and it won’t cost you a penny – a savings of around £150.

family on bench

But how much cover is enough?

The amount of life insurance you need depends mainly on your circumstances and what you want to achieve.

The general rule is that it should be enough to pay off any debts when you die and provide money so your partner and any children will be financially secure.

The Post Office has a handy online calculator that can help you get an estimate of what you need.

It may be worth considering a mix of cover — some to give you a lump sum and some family income benefit, which will pay a monthly income for the remaining term of the policy.

To cover your mortgage and other debts you need a lump sum payout. Since the mortgage is usually the main part of your debts, this part of the cover is probably only required until the end of the mortgage term.

For this purpose, the cheapest and easiest answer is either a level-term insurance – where the payout remains constant throughout the period of the cover, which is ideal for an interest-only mortgage – or a decreasing-term insurance where the payout will decrease in line with the amount left owing on a repayment mortgage.

If you do not have any children, it may be that paying off debts is all the cover you need and your partner would be able to go out to work and support themselves.

One way couples can increase their levels of protection when it comes to life insurance is to buy two separate policies which, according to Lifesearch, only cost about 10% more than a joint policy.

The benefit is that you will get double the amount of cover you would receive from a joint policy and if anything happened to both lives, both policies would pay out, providing double the payout for a similar premium.

With joint life policies, if something happened to one life, the policy ends, leaving the surviving life uninsured. This often happens at an age where the other person is older and may not be in as good health, making the cost of replacing that cover either expensive or impossible.

Like any insurance, it is crucial that you shop around before you purchase a policy. Never assume that your bank or broker will offer you the best deal as many are usually tied to just one provider and can be very expensive.

The good news is that it’s easy peasy to get a quote for cover. At Aviva, for instance, most customers get a quote and decision in just over five minutes.

But bear in mind that it’s crucial that you are completely honest in your answers – especially those about your medical history — otherwise the policy could be worthless.

If you spend the phone call feeling like you are oversharing, then chances are you are providing the right amount of info. When it comes to life insurance applications, there really isn’t a risk of #TMI — if you hold something back you may find the insurer refuses to pay out when it comes time to make a claim.

Kara Gammell

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