The Importance of Life Insurance

With the credit crunch raging around the globe, it’s hard to turn on the TV or pick up a paper without being told we need to be preparing for the future right now, and making sure that our families are protected financially in these turbulent times.

A lot of people have taken that to mean reducing expenditure wherever possible, cutting back on all manner of financial services – often including life insurance.

Unfortunately, this can be seen as a major example of false economy. While it can be tempting to save every last penny for a rainy day (especially giving the recently-shaky state of world finance), one of the major downsides of a global slowdown is that it becomes much harder to cope if half of your household income were to suddenly disappear – as would happen should you or your spouse pass away suddenly.

While such a situation is usually a strain on your finances (quite beyond the terrible emotional stresses that come with a recent bereavement), the credit crunch can make these strains much worse. A small premium per month can provide a cash lump sum that will help keep your family afloat should the worst happen.

Although it’s easy to dismiss this as something that won’t happen to you – after all, isn’t everyone secretly convinced they’re going to live to be a hundred? – a look at the statistics shows that dying can be an expensive business. The cost of a funeral alone can be staggering.

A recent survey from AXA Sun Life Direct indicated that the average expenditure on a funeral had risen 6.6% in the last year, going up to £2,549 – £2,287 for cremations, with an average burial cost of £2,811. Add onto that other possible expenses – medical care, for example, mortgage payments, repayments on loans, or even having to support children on a dramatically reduced household income – and it’s not difficult to see why so many people elect to pay into a life insurance scheme.

There are many different options available, tailored to your individual needs, so it shouldn’t be at all difficult for you to find a payment plan that meets both the amount you’d want to pay in each month and what you deem to be a large enough payout to cover your loves ones in case tragedy struck. Yes, it’s a hassle – more so than most insurances, as the majority of providers require you to have a physical examination before they’ll insure you – but for the peace of mind you can get as a result, it’s often worth it.

While most people understand that it’s vitally important to prepare for the future, no one likes to talk about death – especially their own. However, life insurance can be a very worthwhile investment, and – for what usually amounts to a relatively small premium – can provide your family with a real safety net should you pass away, helping to reduce their financial pressures and allowing them to grieve without worrying about funeral expenses and other pressing outgoings.