Published on May 8th, 2013 | by Pete1
Life Insurance – worthwhile, or where money goes to die?
I’m going to talk a bit now about life insurance, which can feel like a bit of a depressing topic. We are all going to die one day – something which hopefully is not news to you. So, what provisions should we make for this time? How important is life insurance and what is the point of it? Is it something we should be spending our valuable cash on? Should we only wait until we are older to start worrying about what happens after we depart this mortal coil? These are all important questions, and hopefully this post might move you closer to answering some of them for yourselves.
Life insurance is mostly interested in death. Once you have passed on, that is when the people you leave behind (most commonly partners and children) need the insurance you have arranged. Whilst it is not pleasant to dwell on the end of our lives, the reality is that it can arrive at any time, and if things are not in place, your family not only have to cope with your loss, but also with a reduced income. Companies, creditors and service providers are not famed for the empathy and patience, they are, unfortunately, unlikely to overly concerned with the plight of your loved ones if they are not getting money they are due.
A point to remember is that some companies and organisations have ‘death in service’ payments that are given to named individuals in the event of the death of an employee. Therefore it is worth exploring if this is something that applies to you. If your death results in a significant payment to your partner, that is enough to pay off the mortgage for example, you may decide that extra insurance is not required.
Essentially, as with most financial decisions, individual circumstances will have a massive impact on how you decide to proceed. The bottom line is that most of us would like to think that we have left something to those we care about to help them when we are lost to them. It might be that life insurance in one way you can achieve that.