Do I actually need Insurance?

emmadragon

Hi,

I need some help! I have received lots of e-mails about the premiums for Women's life insurance going up in December and to insure now. However knowing whether you actually need this type of insurance is confusing!

My info:
~ 29yrs old non-smoker
~ Home owner with own Mortgage (shared with Father but I pay it all), if I die then my parents sell the house
~ No dependents but will be having kids at some point
~ Generally in good health and with a good job
~ Partner who is not named on my mortgage but will be from November, we're not married but will probably be one day

I've never bothered with Life Insurance or Wills as I always feel that if the proverbial s**t hits the fan then I'll pack up and move back in with the parents - who would welcome me back with open arms. BUT this new hike in prices will be quite considerable so perhaps I should take out a policy now whilst its cheap?

Any help would be gratefully received, I'm not a very rich lady so I could do without another expense each month unless its better to do it sooner rather than later - I could find the money.

Thanks in advance,
Emma

dunstonh

I've never bothered with Life Insurance or Wills as I always feel that if the proverbial s**t hits the fan then I'll pack up and move back in with the parents

How will you manage that if you are dead?

BUT this new hike in prices will be quite considerable so perhaps I should take out a policy now whilst its cheap?

Would probably have been better to get a full critical illness cover policy with guaranteed premiums and not one of these cut down reviewable premium plans.

Have a word with a local IFA and get them to give you advice. I suspect the outcome will be to dump the lower quality product and go with the better one on guaranteed premiums.

jm2926

Life insurance is for when you die, not for situations when you can move back to the parents. The money is for your funeral and to leave behind to make family member's lives easier. If there is sufficient equity in the house to pay for its sale and your funeral, and you don't want to leave money to anyone/anything else, then no you don't need it.

You may want to consider the actual cost of a funeral in calculating this, and consider if you would want the house to be sold if your partner was living there. Could they afford the mortgage on their own? Also whose name is on the deeds and what do you want to happen to your share of the house/money if there is any left after expenses are paid.

emmadragon

Thanks for the replies - I wasn't sure whether life insurance covers payments for critical illness or life assurance does that... Its all rather confusing!

Only myself and my father are on the deeds so if I did pass on then he would be able to arrange the sale, my partner has only just moved in with me and so he's not financially linked to me yet but we are planning on changing this in November. Our agreement will always be that if we split and sell the house the original £12k that I put in would be paid out and anything left will be split 50/50.

I am thinking that until I have dependents or are more financially liked to my partner then I might as well not bother for the time being and look at things to cover my health - your responses are gratefully received.

InsideInsurance

One option is to wait til you are older and thus more likely to claim but then you will find the premiums are much more expensive than if you were to buy now whilst you are young and presumably healthy.

Ultimately the choice is yours and unless you have a perfect crystal ball then there is no "right" answer.

System

Insurance is to cover the losses and costs that would arise if some unlikely but devastating event happened. You have to identify what those losses would be, and who would incur them, were the unlikely actually to happen.
Then you decide whether the cost of insurance justifies minimising that risk.

eg
House burns down
valuable art collection stolen
you drop heavy wrench into wash basin
children left motherless
you leave laptop in taxi
etc.

If the risks are minimal, or the loss immaterial, or you just don't care, then you don't need insurance.