We have no need for life insurance when we are young as we have nobody depending on our financial well being to survive and nobody who will suffer financially if we should tragically die. However as we get older, get married and build a family, we acquire dependants (people who depend on us financially) and so it is probable that you will want to protect them in the event of your death.
It makes sense to insure the main breadwinner of your family because in the event that you lose them, and then in turn, their income, it will not put financial pressure on the other family members in that traumatic time.
There are two types of cover available, Life Insurance which covers you against death for a set period of time, paying out only if you die, and Life Assurance into which you pay premiums for life and your estate will receive a return when you die. Life assurance is guaranteed to pay out eventually as long as you continue to make payments, whereas Life Insurance is over a fixed term (Also sometimes called Term Assurance in the US).
If you have a young family (young children) and your family relies on one income, the it would be a sensible step to take to insure your life, at least while your children are living at home and in full time education as they will be fully dependant on you for this period. As they leave school and get their own income, their dependence will not be as high, and neither will your need for a large income.
How would your family cope if your income was to come to an abrupt halt? If the worst were to happen, what would they do? Would they be able to live? It is these kinds of thoughts that drive people to get their lives insured. The future is never certain but life insurance allows you and your partner to have relative peace of mind about what could be round the corner.
Life Insurance can be inexpensive for cover that will protect your family against major upheaval in the event of your death. Sometimes, in the case of very high earners, or for specific policy inclusions the cost can rise, but in the main, the cost is affordable when balanced against the potential losses possible.
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