Families focus on furniture more than the future

Furnishing their new digs is a higher priority for families than life insurance, according to new research by TSB.

An alarmingly small 11% consider life insurance to be a major concern.

Of the respondents who don’t have cover, 32% say that policies are too expensive, 31% don’t think they need it yet and 15% don’t think life insurance is important.

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Other things on their mind

Securing home insurance is a top priority for 81% of respondents, followed by furnishing the home (78%) and redecorating (76%). Thankfully for insurers, only 5% cited having extra TV channels as a priority over life protection.

Do I need life insurance?

If you died, would your loved ones be worse off financially? If the answer is yes, then you need a life insurance policy in place. It can help pay off the mortgage and support the family if either you pass away.

Depending on your policy, you’ll be entitled to either a lump sum or regular income should the worst happen.

Life insurance comes in a number of different forms, but there are a couple of main types which are worth considering.

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Level term assurance

With a level term assurance policy, the payout your family receives will be the same no matter when you die during the term of your policy. So if your policy covers £150,000 over a 40-year term, it doesn't matter whether you die in year four, 14 or 34, your family will get the full amount.

Decreasing term assurance

With decreasing term assurance, the payout you get decreases over time. This is a popular choice for mortgage holders, as the payout will get smaller alongside their outstanding mortgage balance. It also works out cheaper than a level term assurance policy.

Whole-of-life cover

You don't have to worry about only being insured for a set period with a whole-of-life policy; no matter when you die, your family will get a payout. This added certainty is pretty costly though.

Insurance for the over 50s

If you're 50 or over, you may have seen specialist life insurance advertised on TV and in the press, usually promoted as a way of covering funeral costs. This over-50s cover can work out cheaper, particularly if you have an illness, but there are several things to be aware of, such as you may outlive your cover.

Getting cheaper life insurance

Life insurance is actually a very cheap form of insurance; you can get cover for under £10 a month, depending on your circumstances. There are ways to ensure you pay as little as possible too. Not smoking and leading a healthy lifestyle are two of the more obvious ones. Make sure you shop around for a quote and take into account any life insurance you may already have from your employer.

[Get a free, no-obligation life insurance quote via lovemoney.com]