Life insurance is not a pleasant topic, I must admit.  It will no doubt crop up in conversation at some point in your life though, usually late into your twenties and into thirties.  No one thinks they’ll need it.  I mean, you have no illnesses or diseases, right?  You live a pretty safe life?

Life is very unpredictable and anything can happen.  I hate to be so morbid throughout this article.  It is only to drive home the significance of life insurance, especially if you have dependents.  The event of your death could mean serious financial implications for those closest to you, and you wouldn’t want that would you?

Here are 5 questions to ask yourself if you are thinking about taking out life insurance in the near future.

Do You Have a Partner or Spouse?

You need to consider if your partner is financially dependent on you.

This may be to keep up with the running costs of your home or cars and maintain the quality of life he or she may be used to.  This usually applies if you are married or have been together for a long time.  Excuse the morbidness again, but if you died today, would your partner be able to maintain his or her lifestyle?

Czech_couplewithcart2 by Ard Hesselink, on Flickr.  This work is licensed under a Creative Commons Attribution-NonCommercial 2.0 Generic License.

Do You Have Children or Dependents?

A real deal breaker is kids or dependents.  If you have children, especially if they are younger and completely dependent on your income to live, then life insurance is a big consideration.  The level of life insurance cover you take out will largely depend on how many kids or dependents you have.  If nothing else, it is peace of mind that in the unlikely event of your demise, your children along with your partner will be well looked after.

Do You Have Any Joint Loans or Mortgages?

If you have any large unsettled loans like a mortgage or a business loan, it may be an idea for both parties to take out life insurance.  You wouldn’t like the other party to be left with a large financial burden.

Of course we never think of these things when we first take out the loan or mortgage.  Just imagine the financial crisis it could cause if one of the parties were to die under unforeseen circumstances.

Do You Need ‘Whole of Life’ or ‘Term Insurance’?

There are typically two different kinds of life insurance.  ‘Whole of life’ and ‘term’.  ‘Whole of life’ as you’d have guessed covers you for all of your natural life, whilst term covers someone for a period of time such as 25 years.  The difference is mainly cost, but having peace of mind you’ll be covered right up until the day you naturally die may be worth it to you.

How Much Cover Do You Need?

The cover you need will vary based on the amount of debt you are in, how many dependents you have, and the kind of lifestyle you wish your family to maintain after you’re gone.  Online life insurance companies like Noble Oak will let you do a quote online and recommend you a level of service.  Typically if your only dependent is a partner then your level of cover can be quite low.  On the other hand if you have a family of 5 totally dependent on your income, your premium will be on the higher end of the scale.

I hope with answering these questions you can gain a little clarity on whether you need life insurance, and what level of cover you need.