No one likes to think about what will happen to the people we leave behind after we die. But it is undeniable that we will all die someday, often without warning. When that time comes, a life insurance policy will make sure our families are taken care of financially and give us peace of mind that our mortgages are paid off and our families are taken care of.
Life insurance is pretty cheap to keep up with these days. Life insurance premiums have dropped to record lows because there is more competition in the market and it is easy to buy it over the Internet. You can now get life insurance for as little as GBP5 per month that pays out a lump sum of GBP100,000 if you die.
What kind of insurance do I need?
Those who do decide to sign up for a life insurance policy, however, often have trouble figuring out how much insurance to get. As the amount insured goes up, so do the monthly premiums. This means that the final amount of insurance is often based on how much the person can afford to pay each month.
Then there's the idea of getting a mortgage. Many of us would not want our loved ones to have to struggle to make the monthly mortgage payments if we still owed money on the mortgage when we died. So, the amount of insurance we get should cover at least the cost of our mortgage, or what's left on the mortgage if we buy a product with a decreasing term.
Take care of your mortgage
In fact, many mortgage lenders today require life insurance to cover the mortgage payments if the owner dies before the loan is paid off. Lenders strongly suggest getting a joint life insurance policy when applying for a joint mortgage. In some cases, a basic life insurance policy that decreases with the amount still owed on the mortgage is included with the loan. But life insurance policies that are sold directly by mortgage lenders may not always be the cheapest ones. Shopping around for life insurance on the Internet can save you up to GBP15 or GBP20 per month on your insurance premiums.
figuring out how much insurance to get
So, what's the best way to decide how much insurance to get? It depends on the family or person, but in general, you should get a life insurance policy not only to pay off your mortgage, but also to give your family and people who depend on you a lump sum after you die. How much of a lump sum you choose will depend on a lot of things, but it should at least cover your monthly household costs, minus your mortgage payments.
