Mortgage broker London and Country has identified five common excuses for not buying life insurance, and why they are mostly wrong.
1. It's too expensive
The cost of life assurance has been falling for many years and can often be less than car or house insurance.
For example, a 30 year old couple could have £150,000 cover for the next 20 years for a fixed monthly cost of £12.96, less than the cost of one takeaway pizza each month, and much better for you.
2. We already have life assurance
Even if you already have sufficient cover over the right term (rare, as families grow and mortgages are extended), with premiums having fallen so much there is still value in comparing costs.
3. The state will pay
How wrong can you be, what planet are you on? While any surviving partner could be entitled to a bereavement payment (£2,000), help with funeral costs or further benefits if they have dependent children, these will not allow the surviving family to repay a mortgage or maintain their standard of living.
4. I have life cover through work
Many employees provide life assurance as a benefit within the company pension scheme. This is limited to a maximum of 4 times the employees' income, is lost should you change employers, and payouts are not automatic as they are discretionary.
5. I'm single so I don't need it
Quite right. Life assurance for single borrowers with no dependents is of little value, but is essential for couples or those with dependent children or parents. Single applicants should look to protect their income in case of serious or long-term illness.
There are many formulae on how much and what type of cover you need, but critical to any decision is getting the right advice, helping you match the options from a wide range of providers to your needs.
Having sufficient cover to clear any mortgage and debts, as well as maintain the family standard of living is ideal, but the premiums must be sustainable so cost it king. It is better to have some cover at a price you can afford, than to have all the bells & whistles.