WE all know life insurance, and perhaps critical illness cover are vital to protect our loved ones if something were to happen to us. But as that something is our own death, we’d rather avoid the subject. Once we have arranged the policy, and made sure the payments are going out each month, we’d rather forget about it.
But just as clothes you bought ten years ago may no longer fit you now, your life insurance may no longer fit your needs. To avoid your dependents being left without the cover they deserve, it makes sense to review your policy on a regular basis. If you don’t, your family might not be able to pay the mortgage and meet the bills if you die. Or it could mean you’re paying too much.
Here are some reasons why you should review your level of life insurance.
Your very good health
When your life insurance was arranged, your provider took your health into consideration.
Providers’ stances on health conditions in most cases have changed, with more insight into medical conditions.
If you have issues with diabetes, a family or personal history of cancer or even BMI, the insurers view may have changed substantially.
Finding providers with more sympathetic underwriting stances could help you reduce premiums or even get cover when you had previously been told it is impossible.
Two become one
If you marry or enter a civil partnership, you will probably want to protect your spouse. If you already had insurance, perhaps to safeguard a child or other dependent, you could to increase the level of cover to include them.
You might have got your first property a few years ago, and got suitable life cover. If you’ve moved up the property ladder, your insurance needs to reflect it. So if you had £150,000 mortgage, and life insurance to cover it, your partner could stay in the home you shared. But if you have moved, and taken out a £200,000 mortgage, they would need to find another £50,000 to keep their home.
Starting a family
Becoming a parent means new financial responsibilities. Your partner may no longer have the same time to devote to a career. You need to replace your earnings and probably at least some of theirs.
It’s not just the loss of a breadwinner you need to consider. Replacing a full time carer can mean costs comparable to a mortgage.
You both need cover. You could have a joint policy or buy a single policy each, which usually costs only slightly more. If both parents die, that means two sets of payouts. If one parent dies, the other parent still has insurance in place.
Changing your employer could mean you lose any life cover that comes with your job. This is a valuable work benefit that often gets overlooked. Any pay increase will also mean a corresponding greater loss of income should you die. Your level of income should always be reflected by your life cover.
Expanding the family
If your family is expanding, you might want to extend the cover. There could be two sets of university fees to find. You might not be able to afford ever increasing premiums for ever increasing cover, but it’s worthwhile checking that you’re getting the best deal.
The value of money continues to fall year on year. We have come to expect it as a fact of life. Your income has probably gone up to keep pace with it, so you may have hardly noticed the steady rise in prices. You may need to up your cover to replace a higher income and make sure the bills can be dealt with.
When retirement comes round, you may find that you’re over-insured. If the children are grown and you’ve repaid the mortgage you might need less cover. But remember, if you have a spouse or partner relying on your income, they could still depend on your life insurance. Some types of cover, called term insurance, may only last until a certain age. Makes sure yours is not about to expire.
After you’ve gone
Even if you have left your dependents well provided for, your life cover can still provide an important benefit. A whole of life insurance cover held in trust could pay off your inheritance tax obligations, and ensure that your estate goes to your loved ones, not the taxman.
Let us help you
Whatever life stage you are at, it makes sense to have the life insurance you need. That’s why it makes sense to contact our specialist team at Continuum.
To discuss life assurance needs, or any other aspect of your financial plans, call Darren Rowe or Viv Swift of Continuum on 01208 815411.
Darren and Viv have over 35 year experience in giving financial advice. They work across the whole spectrum of financial advice from funding the purchase of your home, saving for your retirement or protecting what matters most to you in life.
Continuum (Financial Services) LLP is an appointed representative of CAERUS Financial Ltd, which is authorised and regulated by the Financial Conduct Authority and is entered on the FCA register (www.fsa.gov.uk/register) under reference 497604