16 December 2020
Reading time: 5 minutes
Life insurance can provide a financial safety net for your family, eliminating some of the trauma when they are most in need of help. A life insurance policy will pay out a lump sum in the event of your death, and this can protect your loved ones in several important ways:
1. Mortgage payments covered
Many households rely on two incomes to pay the mortgage and would be unable to meet the payments with just one. Your life insurance payout could cover monthly payments or pay off an outstanding mortgage altogether, securing your home for your partner or family if the worst were to happen.
2. Maintain their current standard of living
Without your income, your family's life could be dramatically affected. With the extra money from a life insurance payout they will have funds towards household bills, expenses such as school fees and treats like holidays and days out.
3. Cover the cost of your funeral
The average funeral cost £4,383* for a burial and £3,290* for a cremation in 2020, with prices expected to escalate to more than £5,000 by 2025**. With the cost of a wake, flowers and professional fees added, the total "cost of dying" has been calculated at an eye-watering £9,263** A life insurance payout ensures your family can meet these costs, reducing stress at a very difficult time.
4. Terminal illness
Most life insurance policies pay out if you are diagnosed with a terminal illness and are not expected to live longer than 12 months. This is instead of a payout when you die. You could use the money to make changes to your home, travel to a destination you have always wanted to see, or pay for private palliative care.
Looking to financially protect your loved ones? Find out more about your life insurance options here.