Do young people need life insurance?
Every individuals circumstances are different and it depends on you. There are many factors that determine whether you should buy Life Insurance and what cover you need. We have put together this list of frequently asked questions.
Do I Need Life Insurance When Im Young?
Financial commitments and responsibilities affect people at all stages of life. The purpose of Life Insurance Cover is to protect those that you leave behind in the event the worst happens. If you have financial responsibilities including a mortgage, family / children that would need the financial support if you weren’t around to support them, then Life Insurance Cover if worth thinking about.
What’s term insurance and whole life insurance?
A term life insurance policy runs for a certain number of years, as defined by the policy, whereas a whole life policy, as the name suggests, will cover you until you pass away. Although whole of life covers you until you pass away, this does typically make it more expensive in the short term, so some people may choose to opt for a term policy instead.
Many people choose a term policy because it coincides with their mortgage or taking their children through their school years. Because of this they don’t feel they need cover once these expenses are taken care of. But it’s a very personal decision and requires the balancing of the costs you’ll pay now and in the future, against the benefits if you were to pass away.
How much life insurance cover should I get?
This depends entirely on your own personal circumstances. If you have financial commitments that you want to cover, you can do some simple calculations to work out how much you need. For example, if you want to cover your mortgage look at how much you have left to pay, you’ll want enough to cover your remaining repayments.
If you would like to leave an amount to cover child costs you could look at how many years you need to support your children multiplied by how much each year you think they may need.
Of course, you may also want to look beyond this to make sure your spouse/partner would still be supported financially in the future, so consider how much you would want to set aside for that as well.
Is life insurance cheaper when you’re younger?
It is generally more cost effective to buy Life insurance when your younger due to the limited health risks associated with older age. The cost of Life insurance is based on many factors such as your age, your health, whether you’re a smoker or not plus things like how much cover you want and how long you want it for.