If you’re considering buying life insurance, one of the first steps is to decide how much life insurance you need. Please remember there is no correct answer for everyone, and the final amount will depend on your own personal circumstances and your budget.
We've put together this helpful guide so you can get started on your own, but if you find yourself needing a hand, please feel free to call us and speak to one of our friendly advisers on 01392 436 193.
Instead of focussing on the numbers right away, you may be better off deciding what you would like cover for. Working out why you need cover will give you a good starting place to deciding what cover you need and how much.
This might include things like:
If you have a mortgage in place, your family or loved ones may need to pay back the remaining balance. To assist with this, you could look into purchasing mortgage cover, which is a cost effective option specifically for mortgages. If you have a mortgage with another person, like your partner for example, you may want to consider joint life insurance.
If you have family and/or loved ones, then making sure they're taken care of is probably top of your list. You can do this by taking out family life insurance. Family life insurance is available as a lump sum payout, or a monthly/yearly allowance. When deciding an amount to be insured for, it's important to total up expenses like bills, rent, childcare, education costs etc. Once you have this figure, you'll have a rough idea on how much cover you need.
If you have outstanding debts, like credit cards or loans, you may want to consider protecting them with decreasing term life insurance to help ensure that the debt is paid off if you were to die. Learn more about decreasing term life insurance.
Protecting your health and lifestyle is something that should be considered by most people. Making sure you can help bay the bills if you become too ill to work can bring valuable peace of mind. Critical illness cover will pay out a lump sum for eligible claims, to help you get back on your feet if you are diagnosed with a critical illness like cancer, a heart attack or a stroke. Learn more about critical illness cover.
Another option is Income Protection, which is like a sick pay policy. This aims to pay out up to 65% of your usual monthly salary when you are signed off sick by a doctor. Learn more about income protection.
If you have a limited company, you may have things that need protecting (including yourself!) Please take a look at our business protection page to see the options available to you.
‘Whole-of-life’ insurance policies pay out regardless of when you die, as long as you keep up with your premium payments. This type of cover is typically of interest if you are determined to leave some form of inheritance to your family, or if you want to help with your funeral costs.
Naturally, these policies are typically more expensive than term insurance policies, since as long as you keep paying your premiums, the insurer will always have to pay out, whereas you may outlive a term insurance policy.
If you’re not sure, speak to us over the phone or through live chat, and we’ll be able to give you all the information you need to help you decide what’s best for you.
Another option is critical illness cover. While this is not a type of life cover, it can be especially helpful for planning for the unexpected. It pays out a lump sum if you are diagnosed with a serious illness, such as cancer or strokes.
This money can be used to help with medical bills, cover any lost income or provide financial support to your family. It is important to note that the illnesses covered and the amount of money paid out will vary depending on the policy.
If you’re not sure, please speak to us over the phone on:
and we’ll be able to give you all the information you need to help you decide what’s best for you.
The short answer is yes. You can take out as many policies as you need to cover the different parts of your lifestyle. For example, you could have a package in place with the following:
Mortgage cover - this would help ensure your mortgage is paid off if you passed away
Family cover - this would help your family maintain their lifestyles if you passed away
Critical illness cover - to receive a lump sum if you are diagnosed with a critical illness
Income Protection - to receive monthly instalments if you are signed off work by a doctor
Whole life insurance - to pay for a funeral, pay inheritance tax, or even to leave an inheritance
Our team of expert protection consultants are here to help. Call for a quick quote and more information now:
(Monday to Friday, 10am to 6.30pm)