How to Calculate the Insurance cover you need
It’s a difficult thing to consider, but every family should consider, and make financial allowances for, the death of the family members who bring the majority of money into the family.
You must think about how your family will manage, financially, when you die? How long will your family be able to maintain the same standard of living before running into difficulties
By answering a few simple questions, you will learn the sum total of Life Insurance you need to cover your family when you die:
- What is your monthly income (after tax)?
- What is the outstanding amount on your mortgage?
- What is the total amount of your loans or debts?
With this information to hand you can speak to a financial adviser who will find the very best insurance quotes for you.
The level of cover you need depends on the answer to the questions above and the length of time you wish to cover yourself for. This would usually either coincide with your retirement age (because your requirement change and pensions carry their own death benefits) or the length of time you have a mortgage for (almost all mortgages insist on a Life Insurance policy to cover them)
Life Insurance will provide a lump sum to your dependants if you die during the term of the insurance policy. You are also covered on diagnosis of a terminal illness, should that diagnosis be at least 18 months before the end of the term of the plan (some providers allow this feature up to 12 months before the end of the term).