Mortgages Are Not the Only Reason to Have Life Insurance
Life insurance is often sold alongside mortgages. But the primary purpose of life insurance is to protect the people who depend on you financially – regardless of whether you have a home loan.
You Probably Still Need Cover If:
- You have children or stepchildren who depend on your income
- Your partner cannot maintain their lifestyle without your earnings
- You pay rent and your partner could not afford it alone
- You support ageing parents financially
- You have significant personal debts
- Your business or partners depend on you
You Might Not Need It If:
- You have no dependants at all
- Your partner earns enough to be financially independent
- You have sufficient savings and investments to replace your income
Rule of thumb: If someone else’s financial situation would significantly worsen if you died, you probably need life insurance – regardless of whether you have a mortgage.
Inheritance Tax Planning
Even mortgage-free homeowners may want life insurance for IHT planning. A whole-of-life policy written in trust can provide funds to pay a potential 40% IHT bill, preserving the estate for children.
Frequently Asked Questions
Yes, if you have dependants. Mortgage is just one reason for life insurance.
Income replacement, childcare, rent, IHT planning, debts, business protection.