If you don't have life insurance, why not?

[ShiteheadRevisited]

My DH says we don't need life insurance because we rent and don't have a mortgage.

But if he died (touch wood this will not happen for a very very long time!!), my salary alone wouldn't cover the rent...plus we are hoping to start a family in the next couple of years.

We are both only in our late 20s but sometimes I really really worry about our financial future... should we be spending money we don't really have right now or not bother??

Me and DP don't have life insurance. We have a mortgage.

If one of us died, the other one could cover the mortgage solo. If one of us died, the other would get a death in service payment of 3x annual salary.

For our personal circumstances, I've never seen the need.

Life insurance is far cheaper the sooner you start. But even though, no point if you're young and don't actually have a real need. You'd be better saving the money towards a deposit or pension etc.

Another point is that it's a lump sum, not a regular amount, so it's a bit of a mis-match to use it to pay rent. It's usually to pay off the mortgage, i.e. a lump sum to pay off a debt.

How long would you need to keep paying rent for until you could get a smaller/cheaper property that you could afford on your own?

Do you/he have pension schemes in place? At the very least, upon death, they'll pay out the current value of the fund, but some will also include a life insurance element too. You/he may already have enough "cover" even if just the pension value, to pay rent for a while.

You need to have a proper evaluation of your respective assets (inc pension values, investments, savings, etc), and ascertain just what you need if either of you dies early, i.e. how many months rent etc. Obviously this evaluation will change with life events, such as buying a house, having children, etc etc.

I have no dependants. So don't need life insurance as who gains from it?

When you have young children Life Insurance is important as in a couple if an adult dies how will the remaining adult manage financially?

Level term insurance of about 10-12x salary if invested will give a annual return about equal to the salary - it will vary but that's the theory.

I don't have it now because I have no mortgage, children are grown up and I have savings. I didn't have it before I had children but once DC1 arrived we insured to cover loss of income should one of us die.

The earlier you get life insurance, the cheaper it will be usually, as the risks are higher with age and after you've picked up various long term issues.

Whilst it is essential to have life insurance if you have a mortgage, or children, your situation is a little less clear. You definitely need to review this once you are TTC. Most people who can afford it have life insurance to cover the mortgage/rent and additional life insurance to cover living costs, education etc.

A small policy of 100k or so can be cheaper than you expect, like £10/month, so have a look around. Use an all-of-market broker and look on MoneySavingExpert for advice.

Also see whether either of your jobs have life insurance included, most professional jobs do at something like 3 x your salary (can be up to 9 x for senior jobs in corporates). You'll need to be sure you name each other as beneficiaries on these insurance policies, as otherwise it will go to next of kin (I think). In your current circumstances, work based life insurance maybe sufficient, although if you were to become seriously ill and unable to work, lose your job and then recover, you would find it very difficult to get more insurance privately.

I don't have insurance as I have a chronic disease which is not life limiting but jacks up the premium astronomically.
My husband did but not enough to cover the mortgage. He died and I had to sell up but had enough equity to buy a house (half the size and in a less expensive area). The rest I invested wisely.

We have no mortgage DH has death in service so not needed

When we took out a mortgage many moons ago we had to have insurance to cover the mortgage if either of us died...
We also then had dependants.
Now we don't have either but carried on paying ....so if either of us dies the other will have a good lump sum to help ...if we both go together I guess it would pay for funerals and give our adult children a little help .

But if he died (touch wood this will not happen for a very very long time!!), my salary alone wouldn't cover the rent...plus we are hoping to start a family in the next couple of years.

You need to consider what in work benefits (sick pay, death in service) you each have along with savings and work from there. Then consider how you each would manage if either of you were unable to work due to an accident or serious illness for a period longer than your employer sick pay. How would you manage if one of you were to be made redundant or if one of you were to die? Awful situations to consider but really really important that you do not leave yourself financially vulnerable when you are reliant on your joint income to pay rent/mortgage and bills.

Thank you all - some really good advice here! I will re-read all replies properly tomorrow and start doing some research.

I do but DH doesn't for the same reason as @Pipandmum. He is also older so due to retire before too long so if he died before that we'd only lose a bit of income.

We arranged it when young, just married with a mortgage but no dependents. Have kept it going since then. Financial advisors keep trying to beat our deal (for the commission it would earn them) but no one has been able to! So we'll hold onto this.

We've added a policy that gives surviving partner a monthly income until the youngest is 18 (and they'd also be mortgage free)

We both have pensions which would go in Trust for spouse/children

And I have a death in service benefit of £100k. (A fixed sum, not a salary multiple)

We joke that we're worth more to the other dead than alive!

My Mum died when I was little - this gives us both tremendous reassurance.

The insurance gives us reassurance! My last sentence above does not read well

My husband does with some great benefits. I have precious had a critical illness so cover is extremely expensive and very complicated to get. I've been turned down but multiple companies. It's not just a case of ticking some boxes and off you go unfortunately.

Previously

Everyone with young children - PLEASE get life insurance if you possibly can. My DH had death in service benefits, and I managed to keep my job through his illness and death, but I might not have. Many don’t. Our DC were 5 and 7 when he died, and bringing them up alone is a long game. Bereavement benefits have really been slashed now. I’m taking a year career break soon - I need it so much - and have been able to afford to work part time so I can be there for the children. They really need me. I haven’t had time to think yet really. I’ve got the money to take that time soon.

I never thought it would happen to me - being widowed in my 30s. If you can get a bit of protection for your kids/partner for the £15 a month we spent, why wouldn’t you?

If things are good financially and you have no dependents then yep, it’s different of course

My 15 year term one has recently expired and I can't get it anywhere because I have a chronic illness and nowhere will insure me. I do get death in service though, so not all bad.

If I make it to 50 I can get an over 50 plan

I don’t have any dependents under 20 therefore why would I need life insurance?

Those that say I gave death in service
What happens when you have retired
You may only gave state pension if you do not have private pension
You will struggle on state pension alone even with mortgage paid off

Oh and we have no mortgage on our house (we have a rental flat with a mortgage).
So what we'd need if I died would be a replacement for my income and my labour (i.e. a nanny).

Just like Tunnocks I too was widowed when dc were young. I just could not have got through if I had had to worry about paying the mortgage. Thanh God my late DH and I had both taken out life insurance. It gives you time to breath rather than wondering how the hell you are going to bring the dc up without your DH's financial support.

I was living abroad so did not arrange life insurance. I was diagnosed with bowel cancer and we returned to the UK to be near friends and family.

I was lucky to be healthy enough to get a job and I have death in service as part of my employment. I was told at the beginning of the year that my cancer is now terminal. I am lucky in that I am on sick leave from work and at the moment they are not managing me out of the business but I expect that if I manage to live long enough I will be retired on grounds of ill health so the death in service will go.

Not all deaths are quick and not all companies are accommodating.

Please get life insurance if you have children or a mortgage.

Getting life insurance isn't easy if you have had recent health problems. My and my dh are un insurable due to getting moles checked, lumps investigated. I would rather be alive and be adequately checked than turn a blind eye and have a developing illness.

because we haven't got round to it DP has a weird (.. probably technically dangerous..) job so it's going to be a mega work up (when we got our mortgage we tried with the default provider and it was a big fat fuck off from them),
and he also keeps having the occasional cigarette which makes it ridiculously expensive!

Sadly I’m in receipt of a life insurance payout. My DW and I took out life insurance policies when our first child came along. And updated it when our second child arrived. She died 9 months later.

The mortgage policy paid off the mortgage. And the second policy pays a small salary every month until our eldest is 18 - another 13 years.

This means I don’t /have to/ work. I can concentrate on raising the kids to the best of my ability. Without stressing about the mortgage and bills etc.

I do work which pays for our extras, and holidays etc.

But obvs. I’d give it all back to have my DW back.