When should I buy life insurance and is it worth it?

Independent

09-05-2025

The thought of passing away and leaving loved ones behind is one that nobody wants to have. However it is important to consider what may happen to your family and finances if you were no longer here – and that's where life insurance comes in.
The topic of life insurance can often be overlooked or avoided which leaves people confused about it or perhaps don't see a point in figuring it out. Here we spoke with finance experts to explain what exactly life insurance is, when should people get it and the big question – is it really worth it?
What is life insurance?
'Life insurance is a financial product that gives your family or loved ones a cash pay-out if you die while covered,' says Ian Cooper, commercial director and product expert at SunLife.
'Life insurance broadly comes into two main types,' managing director partner at independent financial advisors Hoxton Wealth, Chris Ball explains. 'There is term life insurance and whole-of life insurance.'
'Term insurance covers you for a fixed period of time, let's say 25 years,' Cooper explains. 'It pays out if you die during your policy period. The pay-outs on this type of policy are usually quite large, to cover things like an outstanding mortgage. But if you live longer than the period of cover, you won't get anything back.
'Whole-of-life cover, or 'over 50s' life insurance as it's often called, is only available to people over 49. Simply put, it covers you until you die – no matter how long you live. Because it promises to pay out, the pay-outs are typically smaller than term insurance, to put towards things like outstanding bills or funeral costs.
'One key difference between the two types is that not everyone is eligible for term insurance, and you usually need to answer medical questions in order to qualify. Most over 50s plans, on the other hand, guarantee to accept anyone within the age range, regardless of health.'
When should people start looking at getting life insurance?
'I would say as soon as possible,' Ball says. 'Many people may think life insurance isn't applicable to them or that they don't need it.
'However the areas that a lot of people miss out with life insurance is things that could happen like total permanent disability for example – being in a car crash and not being able to work again. That's the type of life insurance that we kick in at those points to cover you. I always advise clients to make sure that they seriously consider it and not just people with children or a spouse. It's for people of all ages that need an income – which is pretty much everyone,' he says.
Cooper echoes this as he explains that while there is no fixed age at which you should take out life insurance, most people decide to when they get a mortgage or have children. 'But it's important to review your cover needs regularly, to ensure it's covering what you need,' he says.
What are the benefits of getting life insurance?
'Both term life insurance and whole-of-life insurance are designed to help your loved ones at a really difficult time,' Cooper says. 'Whether it's paying off the mortgage, or having the spare funds to put towards outstanding bills or funeral costs – it's knowing that you're giving them one less thing to worry about.
'Customers tell us one of the main benefits for them when they take out a guaranteed over 50 plan is the peace of mind it gives them. Because their pay-out is guaranteed after one or two years, they know their loved ones will have something to help them financially when the time comes,' he adds.
'You also get protection and stability with life insurance,' Ball says.
'Of course it's great accumulating wealth and saving into your ISA or your general investment account and pensions. But what if you can't work, let's say for a period of six to 12 months, because you had a heart attack or a chronic disease. Ultimately people would just end up rinsing their savings if they haven't invested in life insurance.
'Hopefully it is the biggest waste of money that you spend but it does give peace of mind. Most people insure their cars, phones and homes – but not a lot of people insure themselves – but you are the most important thing,' he says.
Is life insurance worth getting?
'When people ask me this, I suggest thinking about what financial help your loved ones might need if they were to die suddenly – not something we want to think about, I know,' Cooper says.
'For example, if they were faced with a £4,000 funeral bill, could they afford to pay it? If not, it could add a lot of stress at an already difficult time, so a life insurance pay-out could be a big help. If you already have plenty of money in savings or have funds from other sources lined up, you may not need life insurance. It's totally up to you. But having a financial safety net in place for our loved ones can be hugely reassuring for everyone.'