Do I need extra life Insurance?

TrickyDicky

I currently get a Life Assurance policy from my employer as a benefit that would pay out 4x salary in the event of my death whilst in service. This would pay off most of my joint mortgage. My wife is actually the main breadwinner so it would make her life much easier as we have a young son.

Given this, do I need any other life insurance? is it really worth it? Obviously if I changed jobs I would reassess.

InsideInsurance

Best speak to an IFA who can help you access your needs.

The main consideration will always be of what happens if your employment status changes and the cover is no longer there. Whilst you may decide to cross that bridge when you come to it you may have a heart attack tomorrow making any future premiums massively higher thus it would have been cheaper to buy now and pay over a longer period than buy after your health has already deteriorated. Of cause you could remain fit, healthy and fully employed until your 70 in which case there would have been no need for an additional policy

dunstonh

Will anyone be worse off in the event of your death? Not just immediately but later as well. (i.e. covering debts, replacing lost pension, covering children/family expenses, covering childcare costs as other would become a single parent)

opinions4u

The answer is almost certainly "yes".

How much is your net income?

How much is your mortgage payment?

What's the difference?

How much of that difference do those who would lose out as a result of your death rely on?

What extra expenditure would those who survive you have to fork out (e.g.child care)?

Turning it around, how would you cope financially if your other half croaked?

kingstreet

You should regularly review all your protection needs, preferably with an IFA.

On the actual issue, I'd like my wife to be able to stop working to spend time with our daughter if I died (with no reduction in her standard of living) and the only way she could do that is with;-

- sufficient cover to repay mortgage
- sufficient cover to replace her income and mine for a couple of years or more.

holly_hobby

TrickyDicky wrote: »

I currently get a Life Assurance policy from my employer as a benefit that would pay out 4x salary in the event of my death whilst in service. This would pay off most of my joint mortgage. My wife is actually the main breadwinner so it would make her life much easier as we have a young son.

Given this, do I need any other life insurance? is it really worth it? Obviously if I changed jobs I would reassess.

4 x salary = just 4 yrs of your income - which can soon be eaten up by funeral costs, repaying or reducing debts to account for your loss of income, partner losing salary for a period if extended bereavement leave is read and others unforseen costs ..... unfortunately it doesn't always go far ...

You say your wife is the main breadwinner, but with a young family, would she be able to return to her current job/role ?(emotionally as well as practically ) i.e some people post death of a partner simply don't have the coping mechanism (personally and professionally) they once had due to the stress and emotional toll of bereavement and upcare of family - in which some fair better with than others. Or it could be that whilst she can work longer hrs now as part of her role, without you there she wouldn't be able (or want) to ? Or she would have to find the cost of childcare out of her salary (which as I say could be reduced if she feels a role with less pressure was reqd).

Typically, good advice would be to effect life cover to cover all debts, and the indviuduals salary over the term until your youngest child is at least 16 (18/21 if they are going into FE).

Sometimes that just isn't affordable, so you look to effect the most you can given your budget, which should be at least the mge and anyother debts.

Of course, Mrs Tricky should also have life cover along the same lines (even more so if she is the main earner, Mum and head bottle washer ... as us girls often are !!) - as replacing her salary is just the beginning, you may need to seek a higher paid job or work more hrs, so would maybe want to employ a housekeeper or cleaner, nanny or childcare arrangements - etc ...

Along with life cover (as a main priority with a family), you should both (budget affording) also consider income protection, such as PHI, CI, MPPI.

A sit down and review with an IFA will establish where and what your priority needs are, he will work within your budget and also schedule future portfolio/protection reviews to ensure that as life ticks along your provision remains sufficient and appropriate.

Hope this helps

Holly

p00hsticks

TrickyDicky wrote: »

. My wife is actually the main breadwinner

So in that case, I suggest you also need to be looking at whether she has adequate life insurance. Ask yourself how would you cope financially and manage practically if she died ?

One key question is what additional expenses (if any) would either of you potentially face in terms of childcare etc if the other passed away ?