When should I buy life insurance and is it worth it?
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.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
35 minutes ago
- The Sun
Primark opening new type of store in Britain for first time and shoppers will be thrilled
PRIMARK is set to open a brand new type of store just in time for summer. The bargain retailer is due to bring a new model of shop to the UK high street in the coming months. A new 11,900 sq ft, two floor shop is set to open in Manchester at the Trafford Palazzo. It will be the first ever dedicated Primark Home store to open in the UK. Primark have said the shop will bring together "the best of Primark's interiors offering under one roof." It will host an expanded range of homeware and lifestyle essentials for Manchester shoppers to browse and buy. The move comes following the firms first ever dedicated Primark Home store was opened in Belfast earlier this year. The new location in Manchester will also include a dedicated travel shop to help customers get holiday-ready. Paul Baldwin, Trading Director for Home at Primark said: 'Our mission is simple: to make it easy for everyone to create a home they love, without breaking the bank. "Customer reaction to our first Primark Home store in Belfast has been really positive, and we can't wait to bring this exciting new concept to Great Britain later this summer. "Homes have become more than just places to live, they're an extension of our personalities, so whether it's soft furnishings, statement tableware, or smart storage solutions you're after, our range has something for every style and budget.' An exact date for the stores opening hasn't been given by the retailer yet but it is expected to come this summer. 'One of each please,' shoppers race to Primark for adorable cosy homewear The new store will stock all manner of high-quality essentials like cotton bedding and towels, soft furnishings, small furniture and quirky ceramics. Trafford Palazzo is already home to one Primark location with the new store adding to the retailers offering on the site. Primark stores usually stock a full range of goods from clothes, to home to holiday essentials. For the first time ever Primark will now stock just homeware in a store. The fashion retailer currently employs over 80,000 people internationally. 2 Primark is known for its budget options and huge range, offering an extensive selection of goods at a low price. The retailer boasts over 460 stores globally with the new Primark Home in Manchester boosting this number further. According to the retailer: " Primark Home combines style, comfort and value to help shoppers make a house a home." Thrilled shoppers took to social media to show their excitement for the new stores launch. One user said: "You've got some great home stuff please make this department bigger and give us trolleys." Another commented: "I need one of everything, and two cushions." A third replied: "We need this store in Kalamazoo Michigan." Why Primark is great for looking expensive on a budget By Clemmie Feildsend, Fabulous Fashion Editor AS someone who's no stranger to grabbing a last-minute outfit from Primark for a night out, it's about time that celebrities started catching on too. For as long as I've been heading out, Primark has been my go-to for those 'I have nothing to wear' moments, rushing in at the last minute to find something perfect. And I'm definitely not alone - on any Friday or Saturday night, you'll find plenty of shoppers doing the same thing, right before closing time. But no matter what, Primark always delivers. Now, Rita Ora is leading the charge, showing that you can snag a designer-worthy look without spending a fortune at high-end stores. While Rita's not rushing in last minute for a red carpet outfit, she's proving you can achieve the same high-impact style for much less. Looking stunning in her tailored suit alongside her mum Vera, Rita fit right in among the other A-listers dripping in Prada, Dior, and Victoria Beckham - if anything, she looked even better than some of the guests at The Fashion Awards. With Myleene Klass and Roxy Horner already jumping on the Primark bandwagon, I'm sure more stars will be following suit soon enough.
Telegraph
an hour ago
- Telegraph
The treaty Gibraltar wants, for the future we all need
For over five years, Gibraltar has been at the centre of one of the most complex, technical, and geopolitically sensitive negotiations undertaken by the United Kingdom and the European Union since Brexit. The process has consumed me. It has occupied close to half of my time in elected office, taken over almost every waking hour of the last five years, and, in truth, deprived the people of Gibraltar of their Chief Minister in the way they are used to having him, that is, from fixing housing and parking complaints to defending their sovereignty in the international arena. For much longer than I would have wanted, I have been behind closed doors, in physical or virtual boardrooms, working through the details of a document that will shape the next generation of our people. It has been a relentless, exhausting endeavour. Throughout this time, the UK and Gibraltar teams have worked together seamlessly, 'hand in glove', without a flash of daylight between us. We have worked in close partnership with both Conservative and Labour prime ministers and foreign secretaries; from Dominic Raab, Liz Truss and James Cleverly to David Cameron and now David Lammy. What we have negotiated is not the product of fragmented agendas, but the position of a unified British family determined to find a solution worthy of our people. Without a treaty, Gibraltar could be staring down the barrel of a hard border, marked by endless queues, disrupted supply chains, and a deeply uncertain future for many of our businesses. Our hospitals and elderly care homes would face chronic understaffing, and the surrounding region would suffer the almost certain loss of employment for many of the 15,000 cross-border workers who depend on Gibraltar's economy to support their families. The services we deliver to our people would all come under strain. Our public finances would be pushed to the brink. The self-governing Gibraltar we have built would be diminished, replaced by something poorer, more isolated, more inward-looking, and ultimately less able to thrive as a proud, British European Territory. Instead, we now stand at the threshold of something remarkable, and not just for Gibraltar, but also for the United Kingdom, for Spain, and for Europe and our people. Something bold. Something forward looking and hopeful. Something that finally breaks free of the negative inertia that has defined too much of our recent past. Unlocking potential across borders This is politics at its most elevated. The service-led principle of working for our people's benefit and not the performative personal antagonism that too often infects public life. Real, hard graft that overcomes challenges to deliver progress. This is the kind of result our people demand when they voice distrust and decry the political 'establishment'. Our Spanish and EU counterparts, for their part, have brought to the table a seriousness of purpose that also reflects the gravity of the moment. They, too, have recognised that this treaty is not merely about fluidity of movement, but about unlocking human and economic potential across borders. Make no mistake: the treaty that is now within reach is not one that the Gibraltarians have been forced to accept. Our people voted for us to have a mandate to turn our New Year's Eve agreement of 2020 into a UK/EU agreement/treaty. So we say 'yes' to this agreement, but not because we don't know how to say 'no' when we have to. We did so, emphatically, in 2002, when we triggered a referendum to reject Jack Straw's proposal of joint sovereignty with Spain, and I am just as adamant today that this treaty will not in any way compromise British sovereignty over Gibraltar. That will be set out, black upon white, in the treaty when it is published. It is a legal undertaking given by both sides in clear and unequivocal terms. So to be clear: in this treaty we have not ceded any control of Gibraltar to any authority. Just like today, only Gibraltar will decide who enters Gibraltar – exactly as we agreed in 2020 when Dominic Raab was foreign secretary and Boris Johnson was prime minister. This treaty unleashes the potential to usher in a new era. One in which we move beyond the tired narratives of the past on constant sovereignty disputes, towards a future defined by hope, cooperation and shared prosperity. It will pave the way for better jobs, more investment and lasting stability for Gibraltar and the wider region. It can deliver more harmonious human relations and a better quality of life for all our people. When you read it, I ask that you to look up from the pages of this treaty and see that better reality as it peers back at us from the future. This will be the treaty Gibraltar wants. It will be a treaty the UK and the EU can be proud of. And it will be a treaty that will propel us all to the better future politicians are elected to deliver. When the time comes, back Gibraltar and its proudly British people by backing the Gibraltar treaty.
The Independent
an hour ago
- The Independent
Palace co-owner John Textor would sell shares for Europa League chance
Crystal Palace co-owner John Textor is willing to sell his shares in the club in order to ensure the Eagles can enter next season's Europa League, according to reports. The American, whose Eagle Football Group owns 43 per cent of Palace, has imperilled the club's chance of a first-ever European campaign owing to his involvement with Ligue 1 side Lyon, but is ready to offload his stake to his fellow co-owners in order to bring the saga to an end. UEFA does not allow clubs with the same ownership to compete in the same European competitions in a season. As well as his stake in Palace, the 59-year-old has a controlling stake in the French club, also via Eagle Football. However it is also reported that the European governing body does not consider Textor's influence at Selhurst Park to be decisive and is leaning towards allowing the club into the Europa League regardless. The PA news agency understands no formal decision is likely on Palace's fate until the end of June. Textor has previously spoken of his frustration at how little influence his stake entitles him to, over football matters. Victory for Oliver Glasner's side over Manchester City in last month's FA Cup final gave them their first major trophy and with it a first crack at Europe. However, Nottingham Forest have since written to UEFA to challenge Palace's Europa League spot and in the hope of taking their place. Forest's owner Evangelos Marinakis, who also owns Greek side Olympiacos, placed his shares in the club in a blind trust before the governing body's March 1 deadline, anticipating Nuno Espirito Santo's side's European qualification. At present Forest, who finished seventh in last season's Premier League, are set to enter the Conference League but would take Palace's Europa League place, should they be deemed ineligible.
