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Life insurance

Why it matters

Granted, it’s not dinner table talk, but it’s worth thinking about what could happen to your family financially if you were to pass away. “The point of life insurance is to make sure your child is financially secure if you’re no longer there to care for him,” says Matt Morris from insurance broker LifeSearch (lifesearch.co.uk). If you’re relatively young and healthy, it can cost from £5 a month.

A popular option is lump sum cover, where the insurance company makes a single cash payment that could help your partner cover things like mortgage repayments and childcare. “The other option is family income benefit, which is basically paid out as a regular income rather than a lump sum. Quite often the premiums are cheaper, so it’s worth considering,” says Matt.

What to do  

• Step 1  Check your current employment benefits “Some people get life insurance, or death in service as it’s often known, from their employer,” says Matt.
•  Step 2  Shop around High Street banks are often tied to one insurer and might not offer you the best price. Use price comparison websites and speak to an independent adviser. 
•  Step 3  Get advice on how much cover you should buy “There’s no black and white system, think logically how much your child would need until he’s 18 or 21,” advises Matt.
• Step 4  Consider a single life policy 
Two single policies rather than a joint policy, can provide double the cover. “It’s about 10 per cent more expensive, but you’ve each got financial protection if you split up,” says Matt.