Save Your Child from Taking on Your Debts
10 Jun 2010 Tell a Friend
New research from Aviva shows that over 36,000 people die leaving financial dependents each year, and that a shocking 56% of the UK's 5 million families do not have adequate protection. Insurers like Aviva are releasing products to encourage new parents to start thinking about life insurance, but there is still plenty to do to raise awareness of the problem.
Do you think you have enough life insurance to protect your family? Ask yourself these 4 crucial questions:
How much unsecured debt do I have?
If you owe money on credit cards or store cards, or if you have taken out a car loan or another type of unsecured personal loan, this all counts as unsecured debt. If you were to die unexpectedly, could your dependents continue meeting these repayments?
As you don't have a property or other valuable asset secured against the debt, your dependents would not lose the house if they couldn't meet repayments. However, several missed repayments would result in a damaged credit rating, and failing to repay the debt for a longer period could lead to legal action. Do you want to put your family in that situation?
How many years of school do my children have left?
Even when children are in State education, as a parent you know how expensive it can be to buy uniforms and school supplies, and pay for school trips and extra-curricular activities. If the main earner in your family were no longer around, could your children afford to continue their education? Might they want to stay on for higher and even further education? It's important to consider your child's future when deciding how much life insurance you need.
How many years of my mortgage do I have left to pay?
If you have taken out a mortgage, you are legally bound to make regular repayments on the property. If you were to die unexpectedly with no life cover, you'd be effectively handing all that debt to your family and leaving them with no way of meeting those payments. A few missed payments can damage a credit rating, but continually failing to meet mortgage payments can lead to your family being evicted and their home repossessed. A decreasing term policy is a cost-effective way of ensuring that the mortgage payments are covered, if the mortgage is your major concern.
Am I the main earner in my family?
If you contribute all or a major part of the household income, it is your responsibility to ensure that your family is protected in the event of your death. Of course it's a subject that nobody wants to think about. However, by taking the time to speak to a life insurance adviser, you can carry on with your life with the peace of mind of knowing that you have protected your family and your home against the unexpected.
Click here to request a callback from a life insurance adviser today.