This is a common question we get asked time and time again but as everyone’s circumstances are very different there is not a simple answer to this. In 2021 we all know, probably more so than any time before, that life has a funny way of becoming unpredictable and throwing us curve balls. Most of us will go through many significant events in life from marriage, having children, buying a home to divorce and job insecurity. The current climate and the natural changes in life mean financial protection products are even more important in 2021. It becomes even more relevant if you have any financial dependents like children, a spouse or elderly parents.
Life insurance is there to help you to financially protect your loved ones in the event of your death. It is also a product that many ignore or put to the bottom of their to do list. Whilst life insurance is not the most exciting thing in the world it is one of the most important financial products you can have. No matter where you are in life, if the worst happens, you need the peace of mind that your family and loved ones will be looked after.
When should I take out life insurance?
The honest answer is now! Life can change so quickly and there is never a “perfect time” to start putting measures in place to protect your loved one. The core consideration is coverage and getting the right policy for your circumstances.
Whilst there may not be a perfect time to take out or review your life insurance cover, here are a few key milestones which should prompt you to consider it:
Marriage or Civil Partnership
This change in circumstances should lead you to consider your financial obligations. This may mean your partner is dependent on you financially to cover rent or mortgage repayments, you may have taken out a joint loan or other form of finance together. The key is to acknowledge if you or your partner died suddenly could the other meet their financial outgoings?
Starting a family
This is another milestone in life and it is when you truly find out the meaning of dependant! When starting a family people often overlook the need for increased financial protection. This is one of the greatest experiences in life and thinking about your own mortality is probably the last thing on your mind. However, the consequences of not having life insurance are far worse. It is difficult to think about what might happen if we could no longer provide for them – and that’s where life insurance could offer you some peace of mind. With life insurance, you can rest assured that your family will receive a cash lump sum when they need it most should you pass away.
Getting a Mortgage
Buying a home is normally the largest commitment any of us make financially in our lifetime. A mortgage will also represent the largest outgoing for most people and in the modern era will need at least 2 incomes to comfortably repay it. Therefore, life insurance is vital when buying a new home should you or your partner pass away leaving the other with the full burden of repayment.
When you are planning on retiring, many people like the idea of putting some money away to leave for loved ones. This could be simply not to burden them with funeral costs or to help them
financially when you are no longer around.
Surely, I am too young to get life insurance?
We hear this a lot and very few of us like to consider our own death, especially when we are younger. The truth is none of us know what life has in store for us – 2020 showed us that! The truth is the younger you are the more likely you are to be able to get cheaper rates plus it provides additional peace of mind so you can get on with living your life.
Many of our younger clients get worried that the amount of cover they initially take out won’t be sufficient later on. The good news is you can always apply to increase your cover when the time comes.
Is it too late to get life insurance?
On the other end of the spectrum, we see many older clients that worry they have left it too late and there are no real cover options for them. This is simply not true. There are so many policies that specialise in providing life insurance cover to over 50-year-olds. You are never too old to start considering financial protection for your family and loved ones.
We are aware that knowing which product or rate of cover to choose is a bit of a minefield as there is so much advice and choice available. Parkway have been helping our clients choose life cover for over 13 years and our team of experts can show you what is available to fit your circumstances and budget.