Do I need Life Assurance?

Most of us recognise the need to protect our dependents and understand how investing in life insurance can help in future planning.

The most common reason for investing in life insurance will be to cover a mortgage but it is also part of the review we undertake perhaps after getting married or, more likely, when we have children.

For a single person with no dependents, life insurance may not be necessary. However, if you have debts and no savings, then a small amount might be necessary to pay expenses and prevent someone else being landed with that after you've gone. There is also an argument that you should cover a mortgage but in this case, if you are happy to pass the property back to the bank, or if your beneficiaries are more than able to cover the mortgage payments while the house is sold, then you may not feel the need.

If you have dependents, however, you need to look at the consequences for them if your income were removed suddenly. How much do you earn? Do you have debts? How much is your mortgage or rent? Do you pay school or university fees? How long before your children will be working? Does your partner work? Could they continue to work without your support?

Even if you don't work, there can be a considerable cost involved in getting help with children and around the house whilst your partner continues to work. Life insurance may be a small price to pay to put your mind at rest.