Many UK residents forego life insurance because they think their beneficiaries will be fine without this money. Recent research from Prudential indicates that this may not be true. It reveals that the average family requires approximately £1.8 million to run a household over a lifetime. Few families have this amount of money in reserve and if survivors are minor children or unemployed adults, life may become very difficult when an individual dies without a life insurance policy.
Housing and Living Expenses Revealed
Over a lifetime, a typical household faces £385,000 in direct taxation expenses including national insurance contributions and income tax. Housing costs an average of £508,000 over a lifetime and includes rental fees or mortgages, energy bills, council tax payments, and repair costs. With the relatively high quality of life associated with residents of the UK, cultural and recreational expenses total £230,000 over a lifetime. This includes spending on holidays, electronics, reading material, and lottery tickets.
It can be difficult for a family with two wage-earning adults to maintain this lifestyle and if one of them dies, financial responsibility falls solely on the survivor. This may require the individual to take on a second or third job or make drastic changes such as selling the home and moving in with parents or relocating to another area. If the family consists of children, financial decisions may affect their current or future education.
Life Insurance Can Prevent Financial Troubles
If the deceased individual had a life insurance policy, the payout can be used to reduce some of the household expenses. A policy with a large limit may yield enough to repay the mortgage balance, allowing survivor income to be applied to other living expenses. Some life insurance policies are intended to provide a university education for minor children. Parents rest assured that their children will not go without higher education even if one or both of these adults passes away.
Life insurance benefits established in trust are tax-free, making them even more attractive. By setting aside a small amount of money each month, a policyholder ensures that surviving beneficiaries will never struggle financially. This is one investment that is guaranteed to benefit its recipients regardless of the economy. For more information on this, visit over 40 life insurance help. Even a policy with a relatively small limit may provide enough for survivors to pay funeral expenses and repay several small debts.
Running a household requires a lot of money over a lifetime and in light of this, it makes sense to purchase a life insurance policy. It is never too late to buy this cover, though premiums tend to increase with age and declining health status of the insured. Shopping around will reveal the most affordable policy with the desired provisions and cover limit.
Many UK residents set aside money for retirement, investing in their future.
They should also invest in the future of their loved ones by purchasing a life insurance policy and naming these individuals as its beneficiaries. The payout will allow beneficiaries to continue running the household after the insured has died. Life may never be the same after losing a loved one but having enough money to carry on makes it more bearable.