The average amount of cover purchased by life insurance customers is three times their income. The Post Office warns that for those with dependants aged under 18, or large amounts of debt, it could be necessary to invest in a more extensive life insurance policy to ensure financial commitments are covered.
While many people believe life insurance to be an important investment to cover debts and expenses if the worst was to happen, few carefully consider the various levels of life insurance cover available to them.
Which? recommends that immediate needs should be considered first when purchasing a life insurance policy. Funeral costs, debts and everyday costs will all need to be covered by the chosen life insurance policy. The next thing to think about is monthly income. Life insurance may not need to deliver more than your monthly income after tax to cover the basics. It is vital to consider any additional expenses that also need to be covered by a life insurance policy, such as childcare or mortgage payments.