Let’s face it, for most of us, life insurance is not the most exciting topic and one which many of us don’t like to think about.
What’s more, paying a premium each and every month whilst you’re young and money is tight, may seem completely unnecessary.
But this isn’t the case.
Read Reassured’s ‘top 5 reasons people don’t take out life insurance) and why they should!)’
1) I just can’t afford it
We all incur certain unavoidable costs, such as paying the mortgage, council tax, food shop, fuel and utility bills. So you can’t afford the luxury of life insurance protection, right?
In reality, the cost of life insurance is probably not nearly as expensive as you may think. Especially if you take out a policy when in your 20s or 30s.
Did you know it’s possible for a 36-year-old, non-smoker, to get cover over a 10-year term, for a sum assured of £130,848? And the monthly premium would be just £10. (source Sunlife).
That means paying less than 34p a day to protect your life.
34p won’t buy you a packet of crisps in 2019. But the £130,848 pay out could one day clear your mortgage and/or meet future living costs if you’re no longer around.
So, if you don’t have life cover, we challenge you to give up your daily bag of Walkers and trade it in for the peace of mind that life insurance brings.
Not only would you enjoy the reassurance that your loved one’s are fully protected, but you may lose some weight too!
2) But I’m young, fit and healthy?
You play sport, you eat healthily, you don’t drink and even if you say so yourself, you look and feel good.
From our experience at Reassured, most young people (understandably) never think they’re going to fall ill or worse still.
Although there are multiple factors that determine the cost of a monthly premium, your age is one of the most influential.
As a result, the best time to take out life insurance is whilst you’re still young, enabling you to lock in adequate cover, but for a super-low monthly premium, (from just 20p a day).
Even if you’re not a homeowner, the majority of young people still have some financial commitments that need protecting.
Maybe you have a rental tenancy, credit card debt, car finance or a hefty student loan?
And then there is the average cost of a funeral in the UK, which currently stands at £4,271. Could your parents afford this if the worst were to happen?
3) I think I am covered through my job?
Most employers these days take employee benefits very seriously. They’re commonly used as a bargaining tool, to recruit candidates who are in high demand.
Perhaps you’ve started a new job and been offered death in service, promising to pay out 4x your annual salary if your were no longer around. You probably think you’re fully covered?
In reality, especially if you have a mortgage and a family, 4x your annual salary is not going to provide sufficient long-term financial security for your loved ones.
Whereas, life insurance could clear your entire mortgage debt and provide your family financial security, not just for a few years, but for the rest of your partner’s life, or until the children have left home.
Another important consideration with employee benefits is that, if you change jobs, the policy doesn’t move with you.
So, although employee benefits could provide a welcome cushion and should be factored into the level of personal cover you secure, in many cases it won’t provide sufficient cover.
4) I don’t have children yet
When you take on the responsibility of becoming a mum or dad, it makes us think more seriously about the future.
This is often the time when people are prompted to seize the day and secure life insurance. I know from personal perspective; this is when I took out my policy.
So, if your not a parent, there’s no need for life insurance? Incorrect.
What if you’re in a relationship and have a joint mortgage? Could your partner afford the repayments without your income? Could they afford on-going household bills to run the home? Would they be forced to sell your home?
What if you had borrowed money from your parents to pay the mortgage deposit?
How would your parents get their money back?
Having children is quite rightly a significant factor into why people take out life insurance. But we believe the majority of people would still benefit from having a policy, with or without children.
5) I’m too busy
This is a very common excuse, from our experience at Reassured. ‘Life just got in the way’.
You understand the benefits of having life insurance and you have the money to pay the monthly premiums, but you just never got around to arranging a policy.
Let’s be honest, there are normally better things to be doing than browsing the web, looking for the cheapest life insurance quotes.
And it’s easy to put things off for another day, (that never arrives).
Life insurance is one of those things that we don’t think we need…until we actually need it.
The reality is we don’t receive a reminder and it’s up to us to be proactive.
So what next?
So, now you know that you probably do need life insurance and that you can afford 20p a day to secure your financial future.
But where do you buy your life insurance?
Well, you have 3 options.
- Carry out research yourself online – this is a good way of comparing quotes from the entire marketplace, but can be very time-consuming
- Use a comparison website – this is the most convenient method, as you can compare quotes 24/7. But you will only see the quotes the site want you to see and some insurers will be excluded from their results
- Use an FCA registered broker (for free) – this is a great, cost-effective way of comparing multiple quotes. A broker can compare the whole market on your behalf. They can also help with the application process and write your policy in trust
Now you have all you information you need to seize the day, secure your future and get on with enjoying your life!