News

Jul 04

Lifestyle Changes call for Life Insurance Changes: Is your Cover up to date?

Most people recognise the importance of life insurance and have taken out cover at some stage. But many don’t realise the significance of keeping it up to date. When things change that could impact your finances, it’s important to make sure your level of life insurance cover is still adequate.

Sainsbury’s Life Insurance has revealed in a recent survey that more than five million Brits could be leaving their dependants facing a financial struggle because over half with life insurance don’t update their cover when a significant change occurs in their personal circumstances.

82% of people who changed jobs did not update their cover. 65% who had children didn’t either. 46% got married, yet didn’t alter their life insurance. 59% made an investment in buying a home, but they failed to make any life insurance change and 42% moved to a home with a bigger mortgage, and still kept the same level of cover.

Why you need to update your life insurance cover

If you change jobs, and start earning more as a result, in time you’ll get used to a higher level of disposable income and will make lifestyle changes accordingly. If your life insurance cover doesn’t increase to reflect these changes, your family could face the stark reality of having to reduce their outgoings if your income is suddenly lost.

When you have children, or more children, you need to make sure there is cover in place to take care of their financial needs should you no longer be around to care for them.

Getting married or moving in together sets you on the road to becoming financially dependent on each other, so you’ll need to make sure what you get used to as a joint income is covered by your life insurance policy. Paying the mortgage, the bills and keeping up with the lifestyle you’ve become used to, all need to be considered.

When you move to a bigger house, your mortgage will no doubt increase, as will your bills. Is your life insurance cover adequately covering these increases?

If you take out loans, or borrow additional funds on your mortgage, you’ll need to make changes to your cover so it can take care of the extra debt and not leave your loved ones in financial difficulty. 

It’s not just the mortgage that needs to be covered…

Don’t just think in terms of paying off the mortgage; your life insurance cover needs to take care of much more. Groceries, utilities, council tax, education; all expenses that dependants will struggle to meet without your income.

Life insurance policies have never been cheaper and cover is available from only £5 per month. Speak to an independent, whole of market mortgage protection consultant for advice to make sure you are getting the right level of cover for your needs, and the best life insurance deal on the market.

Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it. 

Bower Mortgage Company: FSA regulated UK-wide mortgage advice from friendly, qualified, experienced mortgage planning specialists. Quality, face to face advice and a strong focus on building long term customer relationships. For money saving mortgage and mortgage protection advice, contact Bower on 0800 411 8668; e-mail info@bowermortgagecompany.co.uk.