Common Life Insurance Questions for Mums
As a mum, protecting your family’s future is more than likely one of your top priorities. Life insurance can help provide financial security in the event of your death. But navigating life insurance options can feel overwhelming, especially when juggling family responsibilities. We aim to help people understand the ins-and-outs of life insurance. We’ve compiled some answers to common life insurance questions for mums, to help you on your way when navigating life insurance.
1. Do I Need Life Insurance as a Mum?
If you have children or loved ones who depend on your income, life insurance can be important. It can help ensure that your loved ones are financially supported if something were to happen to you. This can help to cover the cost of guardianship, pay off mortgages, or assist with education costs for your children, until they can financially support themselves.
2. What can Life Insurance Cover for Mums?
Life insurance can provide a lump sum payout to your loved ones if you pass away. Some policies can also include a terminal illness benefit, which can payout early if you’re diagnosed with a terminal illness, and have 12 months to live. This can help cover expenses like mortgage payments, childcare, and funeral costs.
3. What Type of Life Insurance is Best for Mums?
Term life insurance is popular as it can be affordable and covers you for a fixed period, such as until your children are able to financially support themselves. You can opt for level term insurance (same payout amount throughout) or decreasing term insurance (payout reduces over time). It can be important to choose a term that aligns with your family’s current financial commitments.
4. How Much Life Insurance Do I Need?
The amount of coverage can depend on your family’s current financial situation. Consider your mortgage, guardianship costs, and any debts. It can be a good idea to work out how much your family would need to help support themselves until they can financially support themselves, without your income.
5. How Much Does Life Insurance Cost for Mums?
Life insurance premiums can vary based on your age, health, lifestyle, and the level of cover you choose. Generally, the younger and healthier you are, the cheaper your premiums can be. But as a mum, it can be important to consider protecting your family’s financial future.
6. Can I Get Life Insurance if I Have a Pre-existing Medical Condition?
Yes, you can still apply for life insurance, even with a medical condition. Be upfront about your health when applying. Depending on the condition, insurers may offer coverage at a higher premium or in some cases, can deny coverage. However, it can be possible to find alternative life insurance policies if one insurer declines.
7. Does Smoking Affect My Life Insurance Premiums?
Yes, smoking can increase the risk of health problems, and as a result, smokers can typically face higher premiums. If you’re a non-smoker, your premiums could generally be lower. Some insurers may offer lower rates once you’ve been smoke-free for 12 months.
8. Can I Change My Life Insurance Policy Later?
You can usually adjust your coverage after major life changes, such as having more children or buying a new home. Check with your insurer to see if you can increase your cover or add additional policies without starting over.
9. How Do Joint Life Insurance Policies Work for Mums?
A joint life insurance policy is one that covers two people (or two ‘lives’, as it’ll probably be referred to in some policy documents). It is designed to pay out if one of the two people dies. It’s generally designed to cover a couple – so one partner can be financially protected if the other dies. Bear in mind that a joint policy usually ends after the first death; after which, the surviving partner would no longer be covered with this specific life insurance policy. For these reasons, we do not offer joint policies as we want all policy holders to benefit from a policy payout to their loved ones.
10. What Happens if I Miss a Premium Payment?
If you miss a payment, your insurer may cancel the policy or offer a grace period to catch up. It can be important to stay on top of payments, especially when financially protecting your family. If you miss payments for an extended period, your insurer may cancel your life insurance coverage.
11. Does Life Insurance Always Pay Out?
Yes, it will typically pay out if you die while you’re insured and you were honest about your health when you applied. It won’t pay out if you die after your policy term, after cancelling the policy, or after missing payments (in which case, your insurer can cancel the policy). It might not pay out if you meet an exclusion.
12. Who will get my life insurance payout?
Some insurers offer a trust or beneficiary service. With this you can nominate who would receive the lump sum if you die. These are known as your beneficiaries. The benefit of using these services is that the lump sum is usually not subject to probate or inheritance tax. If an insurer does not offer this service, it may still be best to place the life insurance into a trust to help ensure the money goes to people you want it to go to. If you do not, then the lump sum may count as part of your estate and, if you have one, be left to the person stated in your will.
Polly’s Summary: Mums and Life Insurance
For mums, life insurance can provide financial peace of mind, knowing your loved ones can be financially supported if something were to happen to you. By understanding some of the common questions around life insurance, you can make an informed decision that suits your family’s needs and budget.
It can be important to get the right level of cover in place, to help make sure they’d be sufficiently financially supported without you – but also to help make sure the policy you choose can be suitable and your life insurance premiums are affordable.
