Disclosure: collaborative post
Life insurance can seem a boring topic, but as soon as you become a parent, it’s something you should seriously consider. The last thing you want if you were to die unexpectedly is for your children or significant other to struggle financially. It can be tempting to just bury your head in the sand and hope it won’t happen, but it doesn’t have to be as complicated as you think. I’m going to demystify the different types of life insurance you can get without trying to sell you any. Once you know what you need you can do your own research and compare prices.
Whole Life Insurance
This kind of life insurance will cover you for the whole of your life. See, it is simple when you look into it. This is probably the one to go for if you want the most comprehensive cover and want to ‘set it and forget it.’
Term Life Insurance
Say what? Term life insurance is life insurance that provides coverage at a fixed rate of payments for a limited period of time. After that time period ends, you would no longer be covered or you need to take out a different policy. If the person insured dies during the term set, the death benefit will be paid to the beneficiary. Term life insurance is usually the cheapest way to purchase a substantial death benefit over a specific period of time. Term life insurance may be the best life insurance for you if you just want to cover yourself in a particular period of your life, for example during later life.
Joint Life Insurance
Joint life cover is a policy that covers you and your partner in the one policy. It’s the most commonly used for parents and is often taken out when you get a mortgage together. When you take out a mortgage, you need to have some form of life insurance so that if you pop your clogs before paying off the mortgage, the bank still gets their money.
Critical Illness Insurance
Whilst not technically life insurance, you may want some separate critical illness cover in case you become critically ill or disabled and can no longer work. The policy will either pay out a lump sum or regular payments depending on the type of cover.
Terminal Illness Insurance
Similar to critical illness cover, terminal illness life insurance pays out for a limited time if you are suffering from a terminal illness so you can live in comfort for the time you are ill.
Over 50’s Life Insurance
As you would think, this is a specific cover for the over 50s. Often comes with a free gift, like a pen or shopping vouchers. If you’ve left it late and need cover, this may be for you and can be tailored to suit.
In Conclusion
Your life insurance price will be affected by how many dependents (children) you have or look after, whether you smoke, your lifestyle – do you do extreme sports, drive fast cars – all that goes into what sort of risk you have of popping your clogs. Some look at family history too. We had trouble when we bought our second house together because I was pregnant and they wouldn’t cover me so we had to wait until after I had the baby to get a policy out! So bear in mind the insurance companies will use any excuse not to cover you or pay out. Read the small print carefully before you sign up to make sure you will get the cover you need.
Remember the cheapest may offer the same cover as a slightly more expensive one, but their customer service may be rubbish, or you can never get hold of them. Another thing I like to check these days is how sustainable the company is, and how do they treat their staff? Do they have a UK call centre? Work out what is important for you from the company before you go ahead.
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