I Don\’t Need Life Insurance- I\’m Going to Live Forever

The anthem from Greatest American hero echoes in my ears – ”I’m gonna live forever…I’m gonna learn how to fly -high!”

Plenty of us feel this way when we are younger but as time goes by the realisation dawns that our time on earth IS limited. I’m a optimist so I think only realised that time is precious when I was about 25. Others I know are still risking their necks bungee jumping and zorbing but the impending sense of doom joined me at 25 and I stopped all the thrill seeking activities. Depending on your beliefs you may think that you will get another chance at life but I can’t remember that I had a past life I’m working on the presumption that I only get one shot.

Religion aside the one thing that many of us have in common is that we end up settling down and if we are lucky we have a couple of kids a place to live and a way of providing for all of them. Some communities around the world have strong social systems that mean that if you were to die the family would swoop in and take care of children for you. Polynesian culture can work like this but much of the Western world does not.

So what am I going do to do if I die? I like to consider that I am a lucky person. I haven’t broken a bone had a filling and I have spent the greater proportion of my life well and happy. According to national statistics I stand a very good chance of making it to 80 years old and according to very *ahem* reliable online questionnaires I may make it to 107. I have a mortgage, a couple of kids and the fact is that I won’t live forever. So I decided to look at life insurance. I resisted as for a long time I though that it was only 50 and 60 year olds that talked about life insurance. I want to see my kids grow up but if I can’t be there then I wanted to have them covered.

The trick to getting life insurance is getting the right amount. Too little cover and your surviving family may not have enough cover and too much cover can end up being expensive in the long run.

Quick Fire Answer

Here is a quick option for those who don’t have a lot of time and are not overly concerned with details or saving money each month on premium. One rule some like to use is that the sum of cover should be 10 times your annual income to leave enough for your family to be comfortable.

But, if you are serious about saving money then you will need to sit down and crunch some numbers.

Serious Calculations.

Depending on the state of your finances working out a figure for cover shouldn’t actually take too long. If you are the one taking out the policy then you need to consider the points below.

1. The cost of dying – how much will your funeral cost?

If you don’t want to call up the funeral parlour just yet then check out this site for a guide to some of the costs of your last hurrah. http://www.whatprice.co.uk/health/funeral-cost.html

2. Debts

Do you have a mortgage, loans or outstanding bills? Will you need to pay these off for your surviving family? Remember to consider inheritance tax too, especially if you are unmarried and have an estate more than £275,000.

3. Living

How much money per month will your surviving family need? Consider in your absence how much income your partner could bring in and put this against the monthly costs of running the house hold. If there are savings you may want to leave these untouched in case of unexpected bills or repairs to the estate.

How long will the survivors need support for? The term/length of your life insurance policy has a bearing on how much your premium will be. If you have toddlers then you might want to support them until they are through school or higher education or if you have a non working partner then providing support for them for as long as they might need it.

4. Assets

If you have many assets then if might be an option to sell these in the event of your death to help with providing cash.

Dirty Harry was lucky but some of us may not be so lucky. I’m not counting on the odds to keep a roof over my family’s head.

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