I'm single -do I need life insurance?
Posted on 18th October 2022 at 12:00
Do I need life insurance if I’m single?
Let’s face it, nobody really wants to think or talk about death or dying. It doesn’t seem right does it? If we can switch our thinking around and approach it as ‘life planning’ it can open up conversations that could make challenging times that slight bit more comfortable for those left behind in the future.
Do most people have life insurance?
According to Money Supermarket’s latest study (at the time of writing) , only 58% of homeowners have life cover and around 40% have no policy in place at all. Common reasons for not taking out life insurance include;
• believing other financial arrangements are in place
• it’s too expensive
• not wanting to think or talk about it
• having a pre-existing medical condition making it too expensive
• a lack of knowledge about the benefits of protection insurance
Who is life insurance for?
If you are the breadwinner or have children or a partner who relies on your income, or have a family living in a house with a mortgage that you pay, then life insurance is something you may wish to consider. Life insurance pays out a lump sum on your death providing financial support when it’s most needed.
Even if you don’t have a partner or children, you may have other people in your life that are financially dependent on you. If have outstanding debts such as mortgage payments, credit cards or loans -a life insurance policy could be an option for those left behind to clear such debts in the event of your death. One of the main reasons for purchasing a life insurance policy is to protect your assets, particularly your home in the event of your death.
I’m single- is life insurance right for me?
Here are a few points to consider if you are not sure about whether life insurance is right for you;
• is anyone financially dependent on you?
• do you have outstanding debt such as a mortgage or loan?
• do you wish to leave money to any children or family members in the event of your death?
• could your loved ones cover the cost of any funeral expenses?
I’m young, fit & healthy- do I need life insurance now?
Life insurance premiums will vary based on the type of policy, the length (term) and the sum assured (the pay out amount). Other factors are also taken into account including;
• smoker status (including e-cigarettes)
• health & medical conditions
The younger and healthier you are, the lower your premiums are likely to be. As you get older your risk of making a claim increases, so if it’s something you are considering, it may be better to look into this sooner rather than later. As long as you continue to pay your monthly premiums, the cost will remain the same throughout the term of your policy.
Do I need life insurance if I don’t have a mortgage?
It’s worth considering whether you wish to leave money for family, friends, or even a charitable organisation. It’s also important to remember that if you have unsecured loans or credit card debt, they must be paid off from your estate in the event of your death.
Can a life insurance payment be used to leave an inheritance?
A life insurance payment could be used as a way to leave an inheritance to family and friends (it’s important to note there is only a payment made if you die within the term of the policy). You may want to consider a ‘Whole of Life’ policy. If this is your intention, you may consider writing your life insurance policy in trust. A trust is an arrangement to look after your policy. In this instance, a policy left in trust would not be included in your estate for tax purposes and would avoid having to go through probate with the rest of your assets. This means the beneficiaries could receive the money quicker.
Is life insurance compulsory?
Unlike car insurance, life insurance in the UK is not compulsory.
A few things to think about when purchasing life insurance…
• assess your finances and work out how much cover you need
• answer all questions honestly
• ensure your GP records are up to date e.g. smoker status
• read the small print carefully
• you can cancel your policy at anytime – be aware that once it’s cancelled, you can’t change your mind
• as you get older or develop medical conditions, be aware that changing your policy may become more expensive
• if you are replacing an existing policy, ensure your new one is in place before cancelling your old one
Why use a protection adviser?
A protection adviser is able to listen to your individual circumstances and provide bespoke advice based on the information you give. An adviser will be able to research and access a wide range of products, ensuring you understand the range of available options to suit your requirements and your budget.
Many people turn to online comparison sites to look for cheaper premiums and are often unaware of the consequences of not taking the right type of cover. All applications are medically underwritten for insurance and on occasion, the insurers require further medical evidence such as a GP report. Having an adviser at this point is useful as they are on hand to support you through the whole process.
Ready for a chat? Get in touch today!
How do I find out more?
Call us on 01302 866787 and speak to one of our trusted advisers.
According to our research, the content contained in this article is accurate at the time of writing.
Infomation on this website is NOT bespoke advice to its audience and therefore does NOT constitute financial advice.
Readers are encouraged to contact our qualified advisers directly for mortgage and protection advice.
As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments.
Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home.
Share this post: