What happens if you don't have life insurance?

Life insurance is one those things where you either have it, or you don't. But if you’re yet to have cover, it's something you could benefit from at some point in life. Without it you could put your family/loved ones at financial risk if something was to happen. Not only that, there's the emotional and psychological impact that comes with losing a loved one.

So the question is - why should you buy life insurance? We'll look to answer this as well as highlighting some risks of not having life cover if you died.

Your dependants would lose your income

Your funeral expenses could be a burden on your loved ones

Nobody wants to be a burden on their family, but funerals can be expensive. It could be debated whether the person themselves should plan and fund their own funeral, or whether it's the responsibility of their family. In either case, funerals involve more than just the cost of burial or cremation - there are often additional expenses, such as flowers, catering, and memorial services to consider.

Without your support, your family could be forced to dip into their own savings or take on debt to give you a proper send-off. This could add even more stress and financial strain during an already difficult time. But if you were to own a life insurance policy, your family could potentially use the payout towards the cost of the funeral and other final expenses.

Your debts could be passed on to your loved ones

Having debts is a possibility you may face at some point in your life. While it could be assumed that you will eventually clear your debts, unexpected events like death could leave them unpaid and may become the responsibility of your family and/or loved ones.

This isn't so much of a worry for individual debts, as they may be paid off using money from your estate. Or if there's no money in your estate, they could be written off. Whereas joint debts like a mortgage or joint loan would fall to the surviving party (like a partner or spouse), which they may be unable to pay by themselves.

Your home could be impacted

Continuing with the subject of debts, a mortgage is often the biggest financial commitment most people have. Life insurance can be taken out to cover a mortgage in the event of your death. That way, your loved ones could use the payout to cover the remaining balance in your absence. The same can be said if you are renting a property.

Without support in place, your family might find themselves in a position where they are unable to make payments. In this case, they might be forced to sell the property or move to a more affordable location, potentially disrupting their lives even further.

You put yourself at risk from the unexpected

It's easy to get caught in a web of worry when you think about what could happen if a loved one was to pass away. But it's also worth considering how they feel about the thought of you too passing away. While life insurance can't prevent future death, it could at least provide peace of mind to you and your loved ones.