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Buying or moving home
After spending years building up the money to put a deposit on your first home, the last thing you want is for the mortgage debt you have on the property to fall upon your family, particularly if you are the main bread winner.
In this instance, a product such as mortgage life insurance can help to cover the payments for a repayment mortgage should the policyholder die before it’s paid off. In the case of an interest-only mortgage the lump sum payout from a standard life insurance policy could go towards the debt.
If you’re moving home, it also pays to look again at the cover you have in place, particularly if your mortgage will be getting bigger.
Remortgaging
If you already own a home but have decided to remortgage – perhaps to release some money to buy a new car, pay the kids’ school fees or to carry out a loft conversion – it’s important that your life cover keeps pace with this. If you haven’t already got cover, taking it out now is a good idea. If you had cover before, it’s time to check whether you still have enough, otherwise the sum paid out might not be sufficient to cover what you owe and your family could still be left with a debt burden to shoulder – particularly if they want to stay living in the house.
Get good cover
Parents with young kids
Once children arrive on the scene, you suddenly have little people who are utterly dependent on you, not just emotionally but financially as well. Making sure there are funds available to look after them, should anything happen to you or your partner, becomes vital. A lump sum payment could go towards replacing the salary that you or your partner brought into the household, or to cover the childcare costs while the remaining parent goes out to work, or to help cover school and university costs.
Added extras
Life insurance doesn’t have to mean just receiving a lump sum should the policyholder die. There are added extras you can use to make your policy more flexible.
For instance, for as little as just a few extra pence a month, you could add critical illness cover to your life insurance plan. This will pay out a lump sum if you are diagnosed with a critical illness that is defined in the plan and you survive for at least 14 days.
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