Should I have life insurance?

MikeL93

I am 31 with a 15 month old son, I am the main bread winner in my house as my girlfriend only works part time. I have looked into policies and life insurance is coming out at around £20 a month.

Is it something I should have as I have two people at home who depend on me.

FrugaiMacDugal

Do you have a mortgage or a works pension?

MyRealNameToo

MikeL93 said:

I am 31 with a 15 month old son, I am the main bread winner in my house as my girlfriend only works part time. I have looked into policies and life insurance is coming out at around £20 a month.

Is it something I should have as I have two people at home who depend on me.

Only you can answer that. 

Do you care what happens after you're dead or not? Some people truly dont or they may care about their offspring but not their partner (a friends in this camp and believes his widow would be married again within the year). 

It's one of those boring adult conversations you need to have with your g/friend, what would she do? Go back to full time working? Could she afford the home on her own if she did? How would childcare work? 

Whilst you're there you may as well talk about what happens if she dies before you, can you afford the additional childcare costs? Who'd do the school run or look after them during the summer holidays? Could you continue working full time as a single parent?

Loss of income is certainly a major consideration but most partners are contributing even if its not financially and that needs to be covered somehow and it becomes financial if you realise you need to employ a nanny or send the kid off to a morning/evenign club to fit round your working patterns etc. 

MikeL93

FrugaiMacDugal said:

Do you have a mortgage or a works pension?

I have both

Mark_d

MikeL93 said:

FrugaiMacDugal said:

Do you have a mortgage or a works pension?

I have both

If you die, your gf would get your works pension (assuming you completed an expression of wish form).  There might also be a 4x salary life assurance attached as a company benefit you get?

I think it's likely you want life assurance so that the housing would be taken care of if something happened to you.

I have no dependents.  My spouse is financially an equal.  If I were to die there would be the life assurance through work, my pension, an my savings/investments..which would all pass to my spouse.  This could repay our mortgage several times over.

MyRealNameToo

Mark_d said:

MikeL93 said:

FrugaiMacDugal said:

Do you have a mortgage or a works pension?

I have both

If you die, your gf would get your works pension (assuming you completed an expression of wish form).  

Assuming it's a DC, which it most likely is. If its DB then it may be a different story given they are unmarried.

Mark_d said:
There might also be a 4x salary life assurance attached as a company benefit you get?

Death in service insurance (its not assurance as there is no certainty they will die whilst working for this company) is ok but is dependent on you staying with this firm, you may find the next employer doesnt offer a DiS policy or the OP may go self employed in which case this falls away and getting life cover in later life is much more expensive. 

Mark_d said:
I think it's likely you want life assurance so that the housing would be taken care of if something happened to you.

Most will by term insurance not assurance, especially if its to cover a mortgage as the mortgage will be paid off at some point. 

Whilst the mortgage is a major cost it would still be a major change for the g/friend a DiS payment is unlikely to cover the lost wages from now until the planned retirement age given the OP is only 35 and presumably g/friend is similar age (in pensions we'd assume she's 2 years younger). 

Maybe the OP doesnt care, maybe they think they'll be quickly replaced. If they are they may or may not care if the new spouse gains the benefit of their insurance or if they want to protect it for their child. 

There's lots of deeply personal factors to consider. Most people are significantly under insured and does mean their surviving spouse has a major change in lifestyle in addition to grieving the loss of a partner. 

dunstonh

The general rule of thumb is that you have a need if someone is going to be financially worse off in the event of your death.

As it stands, your child and their mother would be made homeless some point if you died.  

There may be some death benefits with your pension but it would not be enough.

Emmia

OP do you have a will?

Currently, as you're not married that places your girlfriend in an awkward position as your child would inherit everything rather than her.

Check who can apply for probate and inherit if someone dies without a will - GOV.UK 
https://www.gov.uk/inherits-someone-dies-without-will

user1977

MyRealNameToo said:

Mark_d said:

MikeL93 said:

FrugaiMacDugal said:

Do you have a mortgage or a works pension?

I have both

If you die, your gf would get your works pension (assuming you completed an expression of wish form).  

Mark_d said:
There might also be a 4x salary life assurance attached as a company benefit you get?

Death in service insurance (its not assurance as there is no certainty they will die whilst working for this company) is ok but is dependent on you staying with this firm, you may find the next employer doesnt offer a DiS policy or the OP may go self employed in which case this falls away and getting life cover in later life is much more expensive. 

Plus it depends on you still being an employee at the date of death, and not e.g. having had your employment terminated already because of a long illness.

caprikid1

You really need to speak to a protection specialist and go through all the options and issues potentially.

What would happen if you lost your job ?

Long Term Illness ?

Car Accident ?

For most people death is not the lost likely cause of financial distress, there are far more likely events, consequently life insurance is cheap but the cost of covering the more likely events is more expensive.

badmemory

Being blunt & not intending to offend but - do you care how your child is to be brought up if something happens to you.  Would you be happy if the child's mother starts a relationship with someone just to ensure a roof over both their heads or would she be able to go back to live with her parents?  Without any form of life insurance who would pay for your funeral?