Why Do You Need Life Insurance​?

Updated: 5 Oct 2026

“Whatever excuses you may have for not buying life insurance now will only sound ridiculous to your widow.”

Have you ever thought about what might happen to your loved ones if you were no longer around? It's the last thing you want to think about, but sadly, anything is a possibility in life. While they may have savings or other financial resources to rely on, it may not be enough to cover all the expenses.

Aside from the emotional impact, your death may also put serious financial strain on a family. Family life insurance can provide a financial safety net if the worst happens and protect against some of these concerns. 

In this guide, we'll explore some of the main reasons you may need life insurance cover, as well as the benefits it can offer.

Whole life insurance

A whole life insurance policy provides permanent cover right up to when you die. Essentially, your family is guaranteed a payout – provided you keep up with your premium payments.

The downside is that since the payout is guaranteed, the premiums tend to be higher than other options, like term life insurance.  However, premiums are typically fixed, so you'll pay the same amount each month.

Term life insurance

With term life insurance, you agree to pay a set monthly premium over a certain period of time ( 10 years for example). The policy pays out, providing you die within the agreed term. Should you outlive the term, the policy expires, and you may need to purchase further cover if required.

Due to the fact that you may outlive your policy, premiums for term life policies are typically cheaper than whole life.

You may want to consider term life insurance if you only need protection for a set amount of time -  i.e. to cover a 30-year mortgage, to protect your children until they are 18 years old, to assist your partner if you were to die within the next 20 years, etc. 

Depending on your situation, you may require a specific type of term life cover, such as:

• Level term cover – This type of cover has fixed premiums and a fixed payout amount. This way, you won't have to pay more for cover as you get older. Your family will also receive the same amount from when you originally bought the policy.

• Decreasing term cover – This type of cover is intended to cover large payments like a mortgage. The payout value decreases over time as you make repayments. That way, if you die before it's repaid, your family can use the payout amount to cover repayments. The premiums you would pay for this policy are also usually fixed.

• Increasing term cover – Also known as indexation or index-linking your policy. This is designed to protect the value of the payout from inflation by increasing the amount over time. That way, your family will be protected against cost-of-living increases. Generally, we would expect your premiums to rise as the amount you’re insured for increases.

Who might consider life insurance?

If you have a partner, children, or anyone who depends on you financially, life insurance is worth considering. It can also be important if you share a mortgage or other debts that you wouldn’t want your family to be responsible for if you were to die.

The amount you need and the type of cover you choose depends on what financial obligations you have, such as a mortgage. You may also want to consider the amount of money you’d like to leave behind to help your partner or dependants.   

When many people think about purchasing life and critical illness cover, they tend to only think about the breadwinners. However, the value of a ‘stay-at-home’ parent should not be underestimated. If the main carer in a family dies, the main earner may not be able to work as much as they did before, or they may need to find additional help.

Why should I buy life insurance?

There’s no legal requirement to have life insurance, but it can be particularly important in certain situations, such as:

You have dependants who rely on your income

If you have dependants such as a spouse/partner, children, elderly parents or siblings to care for, they may be left vulnerable without your financial support.

While life insurance can't replace the emotional loss, it can help to cover the income lost by your death. This could mean helping your dependents cover their living costs such as their education, mortgage payments, debts, and more.

You have existing debts

Life insurance can be a smart way to financially protect outstanding debts, such as a mortgage, personal loans, or credit card balances. Without insurance, your family might be burdened with these financial obligations after your passing.

If you’ve got a mortgage, you might want to consider purchasing decreasing term life cover. The payout decreases over time, in line with your mortgage, so if you die before it's repaid, your family will have enough to cover either the repayments or to pay off the debt in full! 

This type of cover isn't always suitable for everyone, though, especially if you're looking for additional protection. For example, if you already have some savings, you could put these towards paying off your mortgage.

You’re planning for future expenses

Life insurance can also play a vital role in planning for future expenses, such as children's education or retirement savings for your spouse. With rising education costs, the policy could help make sure your children’s educational dreams are not hindered by unexpected financial shortages.

Likewise, your spouse might need additional support to help with their retirement planning. Without cover in place, they may be forced to dip into their savings to cover your income or to pay towards end-of-life costs such as a funeral

Permanent life policies, such as whole life insurance, are often a great fit when it comes to planning for the future. With no expiry date, you don't have to worry about outliving your cover.

You're planning to get married

For many newlyweds, the question of whether to buy life insurance won't pop straight into your head. However, it can ensure you and your spouse are financially protected if one of you dies. If you're thinking about buying life insurance for yourself or your spouse, there are some things you should keep in mind.

Many couples opt for joint life insurance – this type of cover protects both partners equally. If one of you dies, the survivor receives a payout - known as 'first death'. This makes sense, since a couple's finances are often interlinked.

If you decide to purchase a joint life policy, here are a few things to think about:

• You'll probably want to start saving money now. Buying a joint policy early on will likely lead to lower premiums over the long term.

• Make sure you understand how much coverage you need. For example, if you're planning on having children soon, you may want to ensure that you have enough coverage to support your family financially.

• Consider using a specialist broker like Cavendish Online. We can provide advice based on your specific circumstances.

You want to cover funeral expenses

Funeral costs can be surprisingly high, and without any planning, it could become a significant burden for your family. According to research, even a simple funeral can cost around £4,285[1].

There's so much to take into account, such as transportation, flowers, burial plots, and ceremony fees. When added up, these can all strain your family’s finances during an already difficult time.

Your life insurance policy could help to cover these expenses, in which case your family won't have to worry about these costs or downsizing your wishes.

Even if you have a funeral plan, it still may be worth taking out life insurance cover alongside it. For more information, please see: Life Insurance vs Funeral Plan - What's the Difference?

You want to leave a financial legacy

Even if your family has the means to get by in the event of your death, you may still want to leave an inheritance. This may be to help give your children or grandchildren a head start in life, such as funding for their first home or supporting their future education. You can also choose to leave your policy to a worthy cause, such as a charity.

If you have a high-value estate, your beneficiaries might be subject to inheritance tax, which could significantly reduce the amount they actually receive. In this case, you could opt to write your policy in trust.

You own a business

As a business owner, your death could have a profound impact on the day-to-day running of the business. Without adequate planning, it might leave your business partners or employees in a precarious situation.

If you're a key part of the business, your absence could lead to financial hardship or loss of confidence amongst clients and investors. Policies like key person insurance can help stabilise the business during challenging times.

If you're a family-run business, it may make sense to have joint life insurance, which can cover two people under one policy. If you or your business partner were to pass away, the surviving policyholder could use the payout to cover debts and expenses.

You’ve had a major life change

Today, life insurance may seem unnecessary, but tomorrow it could make all the difference to your loved ones. This especially applies to key moments in life such as:

• Getting married

• Becoming a parent

• Buying a home

• Taking on joint debts

• Supporting an ageing parent

• Starting a business

• Having a health scare

In any of these cases, life insurance is more than just a policy – it’s a safety net for the people who matter most. It helps to provide peace of mind, knowing your loved ones could be financially secure, even as your responsibilities in life increase.

Your job is high-risk

If you work in an industry where accidents happen frequently, such as construction, mining or manufacturing, then you may want to consider taking out life insurance. This way, if you were unfortunately killed whilst working, your family will be looked after.

How much cover do I need?

Like other types of insurance, life insurance premiums vary depending on how much cover you need. The cost also depends on your age, current health status, lifestyle habits, and other personal details.

It's important to remember that there is no one-size-fits-all approach to life insurance. It depends on many factors, including:

• How much you earn

• The amount of savings your family has

• Financial commitments you have (for example, a mortgage)

• Whether you have children and want to leave them an inheritance 

When you buy life insurance, you'll be asked questions about your medical history, lifestyle choices, and financial situation. These answers will help determine what kind of cover you need and the cost of your policy.

How can I get life insurance?

In today's fast-paced world, getting cheap life insurance cover is easier than ever. Thanks to companies like Cavendish Online, you can find affordable quotes in a matter of minutes. With the help of our expert advisers, you'll have all the advice and guidance you need to choose the best policy for your needs.

When you apply for a quote online, we'll ask you some basic questions such as your age and health as well as the amount of cover you are looking to buy. We'll then show you rates from leading life insurance providers and help you compare the options available.

But if you're not sure where to start, we recommend speaking to an adviser who can provide personalised guidance tailored to your situation. You can call our team on:

01392 436 193

(Monday to Thursday 9am – 5.30pm, Friday 9am – 5pm)

[1]https://www.sunlife.co.uk/over-50-life-insurance/funeral-costs/