Why Life Insurance Is So Important To Me

In June 2020, after many years of renting, my wife and I finally bought our very first home. It was a very exciting and stressful time all wrapped up together but, without question the right decision for us as a family. 

There is so much to organise when buying your own home in addition to lots of dealings with solicitors and mortgage advisors to arrange a smooth as possible purchase. 

One particular part of buying your own home that many people don’t think about is life insurance. It’s very important because none of us know what is around the corner. There is no crystal ball to look into the future. We simply don’t know if we are going to become seriously ill which, sadly could result in one of us passing away. This is why we need to put life insurance in place to protect our family should the unthinkable happen. 

There are a number of questions you should ask yourself when considering life insurance. The first question being how much life insurance do you need. This is particularly important if you have a family to support or a mortgage to be paid should one of you pass away. After all, the last thing you want is for your partner and children to go through the grieving process and then have the additional burden and worry of how you are going to pay the mortgage and bills. 

What would you want life insurance to cover? 

This is a very important first step to decide exactly why you need life insurance. When my wife and I bought our first home, we had long discussions about why we needed life insurance. Unfortunately, as much as you discuss it you will always forget something. 

Here are some of the reasons we wanted the right and correct life insurance in place should the unthinkable happen and one of us passed away. 

1. Looking after our children

We are parents of nine year old twin girls so childcare costs and general living expenses are still very high. This is one of he reasons why it was important to make sure we had enough life insurance to cover their daily costs, but also their future needs such as university fees. We are parents of two children so the costs are doubled and we needed to make sure there was enough money to cover expenses until they were at least 21 years old so that everything is covered if they decided to go to university. 

2. Pay off our mortgage 

As I previously mentioned we recently bought our first home, so if one of us was no longer around it was very important to both of us that the mortgage was fully paid off. We found out the amount of cover we needed. This is dependent on the type of mortgage and how many years are left on the mortgage. We also wanted to make sure that the length of cover matched the remaining term of our mortgage. 

3. Support for your partner 

The mortgage may be paid off, but your partner may need money to simply help and support caring for your children and to make sure their needs are met financially if one of you has passed away. For us, it was very important that there was extra money after the mortgage was paid to help financially. 

How much can you afford? 

Of course it’s important to get the correct life insurance but it’s also important to make sure it’s affordable. The higher the life insurance cover you need the more it will cost. Age also has a bearing. The younger you are the cheaper the quote will be. When taking out life insurance the payments will stay the same for the life of the policy. 

When we decided to take out life insurance it was at times mind boggling and going online actually confused us even more. 

This infographic from HSBC would have been perfect to help us decide exactly what and why we want life insurance, and exactly what life insurance cover we needed. It simply gives concise reasons of what you need life insurance for and it’s very easy to understand. 

Check out the HSBC infographic, ‘How much life insurance do I need?’ below. 

We have now sorted our life insurance out and should the unthinkable happen to either of us then we will be able to grieve in the knowledge that financially everything is going to be ok. This undoubtedly gives peace of mind. 

Do you have life insurance? I would love to hear your thoughts in the comments below.