When to review your life cover

Life cover is designed to provide loved ones with essential financial protection when it is needed most. But it’s not just a one-off decision - it’s important to review and update your policy regularly, especially after experiencing any key life events that may change your circumstances.

Buying a home

In a recent survey, 21% of UK life insurance policyholders said that they were prompted to get cover because it was a requirement for their mortgage. Whether or not it’s stipulated by your lender, it’s essential to get protection if you’re a homeowner, as life insurance could help your family to keep up with monthly repayments in the event of your death.

Getting married

If you’ve started sharing finances with a partner, it’s important to make sure you’re both insured if the worst happened. A joint policy covers two people – it’s often cheaper but usually only pays out once, so a surviving partner would need to take out a new policy. Also, it can be difficult to separate the policy if the relationship breaks down. If a couple takes out separate single life insurance policies, the surviving spouse will still be covered if their partner dies.

The birth of a child

In the survey, 30% of respondents said they got life insurance because they had become a parent. As well as bringing a lot of joy, having children brings great financial responsibility, so it’s important to make sure your policy reflects that. This does not just apply to your first child; it’s equally important to review your level of cover as your family grows.

Planning for the future

It’s not just major life milestones that might prompt you to review your insurance. If you’re thinking about estate and tax planning, you might also review your protection plans. For example, if you’re over 50, you might be thinking about who will pay for your funeral, as this can be a big expense for surviving family members. Over 50s life insurance can help with this – while it is not designed to cover all the costs of a funeral, it can pay out a small, guaranteed lump sum to your loved ones.

Also, writing your life insurance policy in trust ensures that a payout is not considered part of your estate and therefore not subject to Inheritance Tax. Plus, claims can be paid before probate is granted, so your beneficiaries can receive the money swiftly. These documents are legally binding so it’s important to seek advice about this.

Here to help

We can help you review your existing policy or explore new options tailored to your needs and budget. Don’t wait for life to change before you act; take the opportunity to review your cover today.

Your home may be repossessed if you do not keep up repayments on your mortgage.

As with all insurance policies, conditions and exclusions will apply.

https://www.forbes.com/uk/advisor/life-insurance/life-insurance-statistics/

https://www.postoffice.co.uk/life-cover/guides/six-reasons-you-need-cover