How much life insurance cover do we need?
There are many factors to consider when deciding how much life insurance cover you might need:
- Review your current financial commitments: Make sure that the policy you choose is sufficient to cover your financial responsibilities. This may include paying for bills, mortgages, and any debts you may have.
- Think ahead: Think about how your income needs could change in the future. This could include anything from daily living expenses to utilities and weekly shopping.
- Consider your long-term goals: Whether it is planning for your children’s futures or living comfortably in retirement, you should consider the extra money that you may need.
You can use nowsure’s life insurance calculator to work out roughly how much cover you will need based on your average monthly outgoings.
How long does a joint life insurance policy last?
Unless it is a whole of life policy, an insurance policy is set for a fixed amount of time. This is typically between 5 and 30 years.
How long you would like a term life insurance policy to last is entirely up to you. For example, you may wish to be covered until your children are financially independent, or until your mortgage is paid off.
Read our term life insurance guide if you want to find out more.
Can a joint life insurance policy be put in trust?
Yes, a joint life insurance policy can be put in trust. This will make the payout exempt from inheritance tax.
However, married couples and civil partners typically do not have to pay inheritance tax on assets that they leave to each other anyway. Therefore, putting a joint life insurance policy into trust is a more helpful option for unmarried couples.
What happens if a couple with a joint policy divorces or separates?
Most joint life insurance policies cannot be divided if you and your partner split up. If this happens, you will probably need to cancel the existing policy and each take out new policies.
Applying for a new policy at a later stage in your life could mean that you must pay monthly premiums. However, it would also give you both the chance to review your needs and see if a new policy would better reflect your change in circumstances (for example, if you have fewer expenses or a smaller mortgage).