Do I need life insurance?
Life insurance can provide a lump sum or regular income for your family or dependents when you die.
Should I take out life insurance?
If there are people who depend on you financially, and you want them to have regular income or a lump sum when you die, you should consider life insurance. Life insurance could be especially important if you have substantial financial commitments like a mortgage.
A life insurance payout could be used by your dependents to cover costs such as:
- Any remaining mortgage debt
- Household bills
- Funeral expenses
- Loss of income
- School fees
- Time off work
Even if you're not the main earner in your household, you may still need life insurance; a payout could help cover costs for childcare and time taken off work to grieve.
Types of life insurance
You should research your options for life insurance carefully to find a policy that’s right for you. The main types of life insurance are:
- Term life insurance: cover for a fixed period of time (the term).
- Whole of life insurance: generally more expensive than term life insurance, but will provide a payout whenever you die.
- Family income benefit insurance: rather than a lump sum, this provides regular payments for a fixed period of time to your beneficiaries when you die.
How much will life insurance cost?
You can choose the size of the payout, which is sometimes known as the “sum insured”. The cost of your monthly life insurance premium will depend on the size of the payout, as well as factors like your health and your age.
Term life insurance tends to be the cheapest option.
Our comparison tool allows you to compare providers and instantly see what your monthly premiums will be.
Life insurance premiums can vary widely between providers, so it's important to compare providers from across the market.
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Last updated: 03 June 2015