Insurance isn’t the most glamourous of topics but all of us will have some form or another in our lifetimes and it’s something that many of us need, to protect ourselves and our loved ones from a variety of risks. Life insurance is a type of protection, that pays out a cash lump sum to an individual’s family (or chosen beneficiaries) in the event they should die. It’s often taken out alongside changes in circumstance, such as buying a home or having a child but can be taken out at other times too.

Do you need life insurance?

Firstly, it’s important to point out that not everyone needs life insurance, yes it can benefit most people, but it’s particularly useful for those that have significant financial commitments. The main reason for getting life insurance is to protect your loved ones from the risk of financial hardship in the event of your death and if you’re the main earner in the household this is especially true. Whether you’re the main breadwinner or not, you need to pose yourself the question, what would happen to your loved ones financially in the event that you die? It’s a fairly morbid question to ask, but an important one. Chances are the last thing you’d want to happen while your family is grieving their loss is for them to be worried about how to pay the bills or keep a roof over their heads. That’s where life insurance comes in. By taking out a life insurance policy, you can ensure that all of your debts and financial commitments are paid for, so your family doesn’t need to worry about money in the immediate aftermath of your death.

Top reasons for taking out life insurance

There are a multitude of reasons you may take out a life insurance policy, these are among the most common:

  • Buying a new home
  • To cover rent
  • Getting married
  • Having a baby
  • Planning for a funeral
  • Leaving something for the next generation
  • To cover bills and debts

Whatever your reason for taking out a policy though, it’s typically to protect your loved ones in some way, shape or form.

What affects the cost of life insurance?

There are a variety of factors which will affect the cost of your life insurance, some you’ll have control over and others you won’t. Here we summerise some of the most important influencers:

  • Your age – sadly policies will get more expensive as we age
  • The type of policy you choose, level, decreasing, whole of life
  • The level of cover, i.e. size of the payout
  • Whether you’re a smoker
  • Where you live
  • What your job is
  • Your health and your family’s health history
  • Whether you do anything hazardous like scuba diving or rock climbing

As we age our health tends to deteriorate and we become more prone to illnesses and have a higher chance of dying. For those reasons, it is usually better to take out a life insurance policy sooner rather than later. The longer you leave it the higher the monthly premiums will become.


*Content courtesy of The Voice*