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Life insurance is seen by many as a scary thing. After all, it forces us to face our own mortality and plan for our loved one’s financial future after we are gone.

There’s also a fear of getting something so important horribly wrong. What if I get an insufficient cover amount or the wrong policy length? Do I need whole life insurance or term-based cover?

Fret not, we have identified 10 of the key factors to consider when buying life insurance

1. Your health and age

If you want to secure the best life insurance premiums (monthly payments), the trick is to start young and live healthily.

Anyone older than 18 is eligible for life insurance, with the maximum age varying from around 70 – 85 years old. However, the pitfalls of age tend to leave us with pains, aches and health complications that our twenty-something-year-old selves would be horrified at.

It makes sense then that the younger you are, the less risk you pose to the insurer, thus providing lower premiums. There are life insurance policies designed specifically for those over 50 years old though, so don’t worry if you feel you’re past your prime.

You’ll also want to keep your body in fine working order. Smoking, high alcohol consumption and a poor diet can all contribute to future health complications.

So do what you were told as a kid – get plenty of exercises and eat your greens. In this situation, health is wealth and you’ll be saving a lot of money on your monthly premiums. And, even if you’re a little bit more seasoned than others, it’s always worth improving your health.

2. Occupation and lifestyle

So, you now have good health, minus the odd chocolate bar and a glass of wine here and there, and you’ve decided to take life insurance before you get any older. Next, it’s time to look at your occupation and lifestyle.

Are you chasing dreams of being a daredevil stunt person – taming lions, juggling chainsaws and jumping off very tall objects?

If yes, you’re probably going to struggle to get a low life insurance premium. Jobs, including builders, emergency services and the forces which have a risk of injury and death are going to have a higher risk to the insurer and result in higher premiums.

We’re not saying change your job so you’re sitting in an office cubicle all day but take into consideration that the price you pay can be reflected by your occupation.

It’s the same as outside of work. Are you the type whose hobbies include curling up with a good book or skydiving out of planes through rings of fire? If you’re the latter, then that’s going to have a big impact on the amount you pay.

While these are obviously two extreme cases, it makes sense that if you have dangerous hobbies, you will need to pay more for your insurance.

3. You’re having a new baby

Maybe your crazy days of skydiving (or book reading) are behind you and a new baby is on the way. Whether it’s your first or one of several, your world has just expanded, and you can probably feel a mix of excitement, terror and the wallet in your back pocket getting lighter.

It’s an understatement to say that children are expensive. They need things, require feeding several times a day and are always looking for the next shiny thing for a minimum of the first 18 years of their life. 

So, you need to ensure that your children can survive if you were no longer around. Education costs, food, clothes and everything they need until they reach either adulthood or financial maturity should be considered in the sum assured (the amount you would get if you pass away).

4. Your mortgage/rent and other outgoings

Whether you’re keeping your hatchlings under your wing or focusing on just you and a significant other, life insurance is the easiest way to assure your loved ones still have a home if you pass away.

Of course, you could just have the house paid off outright already, but according to research, the average mortgage debt in the UK is £131,724. And let’s not even talk about how much you could be paying for a lifetime of renting…

If you’re the main breadwinner for your family, this can ensure that your family can sustain accommodation payments. However, with other debts, utilities, food, travel and a whole list of other things deemed essential, you want to make sure your loved ones have enough to cover all the survival basics and maybe some creature comforts.

5. The future

With or without you, your family and their situation are going to change.

Children grow up and go from being expensive to bigger, moodier and more expensive. For the adult portion of their lives, you may want to ensure they have funds available to pursue further education or even a deposit on their own home.

Maybe you just want them to be able to afford a car so they can drive off and make their own way in life. Whatever the reason, what you may be spending a year on them now isn’t necessarily how much they need in future years. It may take some guesswork, but you want to make sure they have enough to reach adulthood or financial maturity.

Also, if you’re lucky, your parents and/or grandparents are still around. But they’re not getting any younger. They may require additional support, which may have to be subsidised by you. Would they be at a loss if you’re not around? 

If so, then life insurance is an option to cover additional medical or carer costs if you were to pass away before them  

Finally, it may seem like everything is getting more expensive these days. Well, it is! Inflation may be around 9% at present but who’s to say it won’t increase further.

You can’t predict inflation (well, unless you’re an economist reading this) but it’s worth having a little bit extra on your life insurance policy in case it does increase.

6. Your budget

That’s if you can afford it, of course. You may have decided upon a fancy life insurance policy and worked out the amount your family needs if you pass away. 

However, if you can’t afford the monthly premiums then you need to consider lowering the amount unless you want to be potentially throwing money away.

If a policy is unpaid or if premiums are missed, that policy is terminated, and your family’s claims will be unsuccessful. 

If you can’t afford the full amount of cover you need, even a fraction of it can be better than your family receiving nothing. It’s still money they wouldn’t have received otherwise.

7. How long your cover should last

Of course, another alternative to the cost is to cap the length of your life insurance term.

Terms for life insurance range from 5 – 40 years, with some even able to last indefinitely until you pass away. Deciding how long your life insurance needs to last can drastically impact how much you need to pay a month. 

But how long should you be covered for? Well, it depends on your priorities.

If you want to cover your mortgage or your children reaching adulthood, then you’ll already have a length in mind. Making sure your spouse is well taken care of once you’re gone or your children reach financial maturity may require a whole-of-life policy but will depend on your personal circumstances.

8. Your funeral

Some people may use their life insurance for their own funeral.

Regardless of what we do in life, we all end up eventually dying. Unless of course, you’re reading this and the secrets of immortality have been unlocked. If that’s the case, this section may not apply. However, for everyone else, it’s worthwhile having a funeral plan for when you’re gone.

Recent studies have shown the average basic funeral is £4,056, with the average cost of dying being £8,864. And you thought life was expensive!

Whether you want to be buried, cremated or shot directly into the sun, you want to ensure the costs aren’t passed on to your family. If this is your only concern with your life insurance, there are funeral cover policies sold at Reassured solely designed to cover these costs.

9. Your medical history

Everyone’s life ends, but the question is how you reach the end of that road.

Unfortunately, not everyone dies peacefully at a ripe old age, surrounded by family and friends. It’s a sad reality that some people will die from accidents and others will die from health complications. 

If you have a medical condition or poor health, it’s worth factoring this into your life insurance.

Medical conditions can affect your life insurance in multiple ways. The price of your premium may be higher, or you may be refused cover by some companies as you’re deemed too much of a risk for the insurer. You may even decide to take shorter-term life insurance if your life expectancy is lower than average. 

These are grim possibilities but worth considering to ensure you get the best affordable option for your situation.

Some companies offer specialist impaired risk life insurance and are able to cover up to 50% of people who have been rejected previously.

Regardless, it’s worth doing a little research to find life insurance for your personal circumstances.

Please note, that it is possible to secure certain life insurance policies without a medical exam, however, this could affect the level of cover protection you are able to acquire.

10. You have no other form of cover in place

Some jobs offer a death in service benefit equal to a multiple of your salary.

You may think that this could be a suitable replacement for life insurance, which may be combined with some savings. After all, your family have been living off your salary for this long, right?

However, after a few years that this may cover, what happens next? If you have children, your partner may have to leave their own job or cut their hours to look after them. If your family are renting, where’s the additional money going to come from

You need to be looking at the long-term future, as well as the short term. Savings and death in service may cover your funeral and a few years of day-to-day life, but they’re not necessarily going to pay off the mortgage.

One final note

At this point, you may have put your cuppa down and still be counting on your fingers, scratching your head and muttering to yourself, how much life insurance do I need?  

If you’re still struggling to calculate the amount required, it’s worth seeking out an FCA-regulated life insurance broker like Reassured. Reassured are able to find and compare multiple quotes for free and can help you find the most affordable cover.

There are different types of life insurance for many individuals and their personal circumstances. Regardless of who you are and what scenario you want to cover, life insurance can be a valid option. Not so scary now, is it?