Life happens, and life insurance can give you peace of mind while it does.
To re-cap, the point of life insurance is to provide a cash sum to your dependents (your partner or children maybe) if you die or are diagnosed with a critical illness and expected to live for less than a year.
As your circumstances change, so should your life insurance. Here are five occasions when you should check your level of cover...
1 Climbing the property ladder: Do I need life insurance for a mortgage?
The main (though not only) reason for buying life insurance is to ensure that all or part of your mortgage would be paid off in the event of your death.
Check to ensure your current mortgage is covered by the ‘sum assured’ (the guaranteed amount you would receive in the event of a pay out).
2 Getting married: Is it time for joint life insurance?
Now’s the time to protect your partner from any joint risks which can be covered within your life insurance plan.
You may want to review what you have in place and see whether it is worth buying a joint policy (which may be cheaper) or increasing what you have separately.
3 Life insurance for the family
Insurance may not be at the forefront of your mind, but starting a family is a key moment to check your cover.
From birth to the age of 18, the cost of raising a child is between a little under £80,000 (for a boy) and just under £109,000 (girl), according to one study*. If you have bought life insurance to cover living expenses too, you may need to increase your sum assured.
4 A change of career
If your expenses increase as your income does (and who doesn't spend a bit more when they earn a bit more?), you may wish to increase your level of cover.
If you have moved company, find out if you have a ‘death in service’ employee benefit. This pays out a tax-free lump sum if you are employed by the company at the time of your death. If you previously had this and no longer do, you may wish to adjust your insurance accordingly.
5 What happens to life insurance when you retire?
By the time you stop working your children may no longer be financial dependents. However, if your partner or grandchildren still depend on your income, life insurance may still be necessary.
Review your level of cover to ensure you have appropriate plans in place.