5 reasons to review your life insurance

Baby holding a grown-ups hand

News & Insights

MoneyPlus Features Team

15th May 2014 at 2:11pm

This month marks the 253rd anniversary of the first life insurance policy being issued

in the USA.  So here’s a timely reminder why reviewing your level of life insurance is time well spent looking after your family’s future, this month.

When I think about the plans I have for my family, I’d much rather think about which pizzas we’re going to order on Friday night, than what might happen if I die!

However, without considering the impact death may have, we cannot plan ahead to make sure our loved ones are provided for. Here’s 5 reasons why you might need to review your life cover :

1: Childcare costs

If one person is taking a career break to raise a family, have you considered the impact their death would have on childcare? It may mean the other parent has to cut down to part-time hours at work or take on full-time childcare. With part-time childcare now costing on average more than a mortgage, it might be the right time to ensure that both parents are covered with life insurance.

2: Moving Jobs

Changing employer could mean you lose any life cover that comes with your job or you receive a different level of cover. This is a valuable work benefit that is often overlooked when switching jobs. Any pay increase will also mean a greater loss of income should you die. Your level of income should always be a factor taken into account when reviewing your life cover.

3: Mortgage

Life insurance policies are often bought when we finalise our mortgage. But with house prices changing frequently, and more families repaying mortgages or switching providers, it’s easy to forget about the life cover –  you may now have too much cover or not enough. Check if this affects you.

4: Hopes for your family

Having children makes you more aware of the everyday costs but what about your hopes for your children? If you’re saving regularly for their future, you may have a specific goal in mind. Have you considered what happens if you were to die without meeting that saving goal? A plan where the level of cover decreases over time (as you simultaneously increase your savings) could help protect any shortfall you might have.

5: Inflation

We’ve talked about the dangers of inflation before, but some plans do not keep up with this increase in the cost of living. A plan bought in 2003 to cover £200,000 of predicted costs would need to pay out £267,840 today to cover the same costs. Would you be happy leaving your family to meet these extra costs?

These are just some of the reasons to review your protection this year, and it may turn out to be cheaper than a monthly pizza night!

There’s more information about life cover here and the Money Advice Service has information to help you choose the right level of cover.

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This blog and any responses to comments are not financial advice.  Insurance products available through Standard Life are provided by LV=