When Should You Start Thinking About Life Insurance

Posted November 20, 2020 by in Lifestyle

Very often, people avoid the thought of death and issues related to it. Nevertheless, passing away is a natural part of the cycle of life. However, despite this inevitable event, families become financially disabled due to the death of one member.

Apart from the grief loved ones may endure and have to come to terms with, there are some unavoidable concerns on sustaining the family. This is one of many reasons why most people attach seriousness to life insurance. It enables surviving families to receive some cushioning upon the demise of loved ones.

Did you know each year, over 700,000 widowed women are left alone to deal with financial pressures? This shocking number calls for even more reasons why you should start thinking about life insurance.

Here are some instances when you should think about getting life insurance:

When You Start a Family

It is open knowledge that priorities shift when you begin to have children or start a family. Across the world, it is mandatory to provide for your offspring and take steps to ensure they are catered for in the event of a parent’s demise.

The costs of providing shelter, health care, clothing, private education, right up to university expenses are significant. Sometimes, in the momentary excitement of having a new-born, many people forget about taking steps to secure their future.

In the UK, many new parents seek an insurance broker’s services when children come into the picture. It provides peace of mind knowing that children are financially secure; there is enough valuable inheritance to pass on to the children, which may assuage fears of financial turmoil.


One significant benefit of marriage is the satisfaction of knowing your spouse will provide support and companionship. However, take a minute to find out if now is the right time to buy life insurance. In a lot of cases, the right time depends on external factors and circumstances. That explains why this may vary from person to person.

You will require life insurance if your existence is of financial benefit to others. In other words, people who depend on your income are the reason you should get one. In other cases, it is an excellent way to manage debts you do not want your family burdened with upon your exit from the world. Owning up to life insurance as newly-weds could become one of the most rational financial decisions you both take.

In addition to this, you and your spouse should be mindful of clauses and conditions in such policies. The specifics of the agreement must be clear and unambiguous for all parties involved. There have been instances where personal life insurance agreements covered only one spouse and not the other. In such scenarios, a joint life insurance policy may be a better option.

When You Own a Business

You may not have to be overly concerned about a life insurance policy if you are young, unmarried, and without dependents. If you are employed, your expenses may be your only concern. On the other hand, what if you own a business and are responsible for monthly salaries? Perhaps, you have a business partner who invested in the company and your sudden death could wreak havoc on livelihoods.

As a general rule of thumb, setting up your business partner as a beneficiary in the life insurance policy will be an excellent professional decision. There will be no disruptions in the company’s daily operation should either one of you pass on. Even in situations where you are the sole proprietor, such a policy may take care of repaying some business loans.

When Taking Out a Mortgage

A home mortgage may be the most expensive purchase one will ever make in their lifetime. In the UK, the average monthly mortgage payment is £669, which may span over decades. What this means is that the moment you begin monthly payments on your home, a life insurance package may become a safety net in a worst-case scenario. Especially if you are the primary breadwinner responsible for mortgage payments, it will be in your best interest to do so.

An annuity calculator is ideal in this instance, but how exactly does this work? A life insurance policy may come in a lump sum or monthly income and enables the surviving spouse or family to continue making mortgage payments (following the policyholder’s death) towards the home’s purchase.

In the event of a joint mortgage, most facilities will probably require a decreasing term policy. This type of life insurance policy is over a fixed period. As a result, monthly pay-outs reduce throughout the insurance policy. 

When You Have Enough Money in Your Savings

The purpose of tying loose ends upon a person’s demise is what drives the need for a life insurance policy. Admittedly, some debts can only be discharged when there is proof of death. If there is not enough money to clear them, it may have to be taken out of your estate. That notwithstanding, it softens the blow of grief.

As a solution, finance experts usually recommend setting up your savings account for this purpose. Do you have enough money saved up at the bank for a rainy day? If the answer is yes, take out life insurance to cover burial expenses and every other responsibility that needs financial coverage.

Besides, in the UK, the average cost of a funeral is £3,700. If this is an amount you can easily cover, you may want to spare others the burden of footing it. 

When You’re Young and Can Afford It

It is common knowledge that the younger a person is, the better it is to qualify for lower premiums. Unfortunately, because old age is associated with increased health conditions, life insurance is usually more expensive. In a few cases, once a person goes beyond a certain age, they may not qualify for a purchasing plan.

On the other hand, younger persons are saddled with repaying student loans, car payments, and sometimes mortgage. Although taking care of the current loan is of utmost importance, it may become almost impossible to take out a life insurance policy. If you go ahead with it, it may impact your ability to save up for retirement.

It is the more reason this list item emphasizes being able to afford it. It is also worthy of note that life insurance packages are sold as term policies; they may even expire before they come of relevance to you. Whatever your decision may be, focus only on what works best for you.

When You Need Financial Security in Times of Ill Health

Everybody gets sick at some point in life, and it is even more crucial when this is a life-threatening condition. A life insurance package taken at this point may become the best decision you could ever take. With some policies, life insurance packages begin pay-outs upon diagnosis of a terminal condition. Fortunately, as morbid as this may sound, it gives you and your family some cushioning during the trying times leading up to the last day.

Perhaps, it gives the dying person a sense of fulfilment, knowing that they helped provide financial security when you couldn’t work. If it is not a terminal illness, it may be a long-term disability that your life insurance package may offer as well. With proof of your inability to work due to an injury, the company can begin timely pay-outs to make you and your family comfortable.

When Creating an Inheritance for Heirs

Sometimes, you may not have any physical assets to leave behind as an inheritance for your spouse, children, or family. A life insurance package may become the best inheritance tax gifting to present to them upon your demise in situations like this. Upon purchasing the policy, ensure to list the name or names of beneficiaries to inherit it.

In other instances, the policy may become a substantial charitable contribution you leave behind. With a charity including named beneficiaries in the life insurance policy, you as the policyholder can make a significant input that transcends a cash equivalent. If this is your obvious choice, conduct a thorough internet check of charities that accept life insurance packages as donations.

Although death discussions sound morbid and quite scary, it is better to leave the world knowing you prepared adequately for all loved ones. Financial security, especially in an era such as the COVID-19 pandemic, is a lifesaver for many families in the United Kingdom and worldwide.

Although there are chances that the policy you purchased may never be used, you get to sleep better at night knowing all will be well even when you are no more among the living. Indeed, no one is guaranteed a long life, though we all hope for it. This is the main reason people take out life insurance packages to create some comfort for the families they leave behind.

Hopefully, if you are at this point in the article, you learned a few things about why this is necessary.