Having a child to care for brings a whole new dimension of responsibility into your life, and as such this is one of the key motivators for those buying life insurance. Making sure there’s a financial safety net in place to protect your children is often of the utmost importance to any new parent.
By the same token formalising a relationship through marriage or a civil partnership can be another trigger for arranging life cover. If you’ve just sworn your undying love to someone, it goes without saying that you’d want to make sure they’d be financially secure in the event that something happens to you. Life cover can help to provide that financial security.
But what if you’re at a stage in your life where you’ve done neither of those things? Should you discount life cover as irrelevant to your situation? Not necessarily. Let’s look at the example of Steve.
Please remember that this is a case study and should not be seen as financial advice. If you feel you need financial advice we recommend that you speak to a financial adviser as everyone’s circumstances and needs are different.
Single homeowner – Steve (21)
Steve is single and lives in a house he bought a year ago. In addition to his mortgage, he also has credit cards and a car loan. He manages the monthly payments responsibly so that he can afford to put some money aside in savings. He’s aware that he has a gap in his financial planning because he doesn’t have any life cover, although being single without any children he is not sure whether this is a problem.
With Life Cover, Steve can ensure that his mortgage and outstanding debts would be settled should he die prematurely. He writes his plan in trust, stating that he wants the money to be paid to his parents, who would handle his financial affairs.
Taking out life cover means that Steve can leave something valuable behind for those he cares about. In his will, Steve states that he wants the proceeds of his house sale to pass to his two nephews. At only 21, Steve has taken a responsible step early on towards building a strong financial foundation for himself. If his circumstances change over time, he can adjust his financial planning to cover a partner or children. With a monthly payment of just 5.79 pounds, Steve has made a small financial commitment in return for valuable peace of mind.
Plan: Decreasing term life cover
Term: 24 years
Basis: Single life
Sum assured: 115,000 pounds
Monthly premium: 5.79 pounds
Greenbee Life Cover Premium based on single cover, for a male who was born 2/09/1988 and has not used any form of tobacco or nicotine products (e.g. patches, gum etc) in the last 12 months. Figures correct as of 3rd November 2009.
So, even though you may think you’re too footloose and fancy free for life cover to be relevant for you it’s worth delving deeper. Is there anyone you’d like to leave something for should the worst happen? If so why not get a quick life cover quote online today, to see how much your monthly premiums might be.
Please remember that inflation will reduce the spending power any money that Steve gets back in the future. It is important that they regularly review their cover to make sure that it still meets their demands and needs.