Three questions you need to ask yourself when it comes to life insurance

Posted by siteadmin on Wednesday 27th of May 2020.

“Life insurance isn’t often top of the agenda for families when it comes to ensuring finances are in order, despite it being an incredibly important consideration to make. To ensure your family are provided for – should the worst happen – it’s vital to have the most suitable life insurance policy in place.”

Nicola Whateley, Director and Independent Financial Adviser at Whateley Wealth Management.


Life insurance refers to an insurance policy which ensures that, if the worst were to happen, a lump sum or schedule of regular payments will be paid to anyone who depends on your income to cover financial responsibilities, such as the mortgage, rent or other living expenses.

1.    Do I need life insurance?

Life insurance isn’t necessary for everyone. However, if you have children, a partner or other family members who depend on your income to cover mortgage costs or other living expenses, having a life insurance policy may be crucial.

Although the thought of passing away is an anxious-ridden thought for many, ensuring your family are provided for is essential. Having a life insurance policy helps you to achieve this. 

2.    What cover amount do I need?

When deciding on the cover amount you require, you should take into consideration your mortgage amount, your age, the age of your partner and the age of your children – among many other lifestyle factors.

Many insurance companies state that the reasonable amount for life insurance is around 6 to 10 times your annual salary. However, you can also calculate a reasonable amount by multiplying your annual salary by the number of years you have left until retirement. That way, you can ensure your life insurance policy amount matches the amount you would contribute whilst you are living and continuing to work[i].

3.    Do I need to include critical illness cover within my policy?

Some life insurance providers offer the option of including ‘critical illness cover’ within your policy. Critical illness cover or critical illness insurance is a long-term policy which covers serious illnesses. It means that if you are to fall critically ill, you will be paid a tax-free, one-off payment to cover living expenses.

As with life insurance, if anyone depends on your income to cover living expenses, you may want to consider including critical illness cover within your life insurance policy. If this isn’t possible, consider getting critical illness cover in addition to your life insurance policy.

Do you need advice on deciding on the most suitable life insurance option for you? Get in touch