Life insurance – tales of the unexpected

Savings

MoneyPlus Features Team

5th August 2015 at 9:11am

Life Insurance

With my current car now beginning to spend more time on the garage forecourt than my own and a demanding family of four to ferry around, I was recently prompted to look at what new seven seat options were out there.

My research soon confirmed a fear that nothing comes cheap these days (even a used option) and I needed to see where I could make some cutbacks. The results were encouraging and also enlightening.

Some benefits of work

When you’re employed, your employer may offer a benefits package which has some great features to help you and your loved ones. I decided to have a look at mine and see if was doubling up on anything that might already be accommodated within my package. I quickly discovered I was.

I took out dental cover a number of years ago, it’s been great and covered me for a number of expensive dental treatments, but I noticed as part of my package I’d already got the option of cover at a fraction of the cost. So my first action was to cancel my existing plan and make a nice little saving to boot.

Covering the unexpected

It was an encouraging start and prompted me to delve deeper. I then discovered I’m also now entitled to a so-called ‘death-in-service’ lump sum payment, which pays out a figure calculated as a multiple of my salary. I already pay a separate life insurance policy so wondered should I cancel this in favour of my ‘death in service’.

After some considerable consideration I opted to stick with it. If something happens to me, I knew my current cover plus that lump sum payment could really help out my family. It was just not a cost I was willing to cut.

However it did prompt me to realise my wife is now a stay-at-home parent and no longer has the support of her previous workplace benefits package. How would we cope if something happened to her, who is going to pay for the cost of childcare?

Ensuring your insured

In the whirlwind of a newly arrived baby, life insurance for a stay-at-home parent may not be top of the list of things to think about. But it’s really worth making time to review how this could protect your family, and enable your partner to continue working if the worst happens, with childcare costs covered by the lump sum from the insurance.

With some forward planning and life insurance, you can lighten the financial burden on your family if the worst happens – your partner will have enough to get through without worrying about childcare bills and how to juggle their work with caring for your children.

Taking action

My next action was to secure another policy for my wife, I was even able to use the money saved from cancelling my dental plan to cover this new policy, which was a bonus.

It’s simple to arrange online, and you can speak to an expert to get more help if you prefer. The ‘term’ of cover, meaning the years the insurance policy lasts, could be until your youngster is aged 18, for example. If you’re after more information it’s worth taking a look on the Money Advice Service website, they’ve a section dedicated to life insurance.

Now I’m motoring

But what of the new car I hear you ask? Let’s just say my local garage owner need not worry about his bills, but at least I can rest easy knowing we’re now both catered for come the worst.

The information in this blog or any response to comments should not be regarded as financial advice.

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