Post Office Life Insurance research has found that the average UK consumer has a life insurance policy valued around £175,000. However, new statistics show that many could be leaving their families in a precarious position if they die without adequate life insurance cover in place.
The average UK household debt is now £58,320. The most costly financial commitments that life insurance policies cover are property and personal debt, which can quickly eat into life insurance policy funds if not planned for adequately.
One of the most important aspects of life insurance is to cover the value of property, so when obtaining life insurance quotes it is vital to work out how much is outstanding on the current mortgage and use this figure as the lowest limit for the life insurance policy. This ensures in event of death, family members will be able to live mortgage-free, alleviating them from major financial worries from inadequate life insurance funds.
Post Office advises you to take into consideration outstanding debt including credit cards and personal loans. The average UK consumer has £4,508 of debt on credit cards, car loans, overdrafts, retail finance and unsecured personal loans.
You should think ahead and consider debt you might accrue during the course of your life insurance policy.