Deciding on the amount of cover you opt for is one of the most important considerations to make when choosing your policy. Too little and your family may be left in financial difficulty at a very bad time, too much and you’ll find yourself paying unnecessary high premiums. Affordability is an important factor when deciding on the level of cover to select, you want to cover yourself for the future without putting too much pressure on your current finances.
How much cover you need depends on your individual circumstances. You need to ensure your mortgage payments and balance are covered and any other debts you may have, initially you want to make sure that in the event of your death your family are not left with large debts to pay.
Then, if you have any dependants; young children who still require financial support or a partner with whom you share financial responsibilities, you will have to think carefully about their outgoings and how much you contribute, would they struggle without your income?
Before selecting a Life Insurance policy, it’s a good idea to check with your employers whether they provide any kind of life insurance such as a death in service benefit, which will pay out if you die whilst under their employment. Remember that these policies are only valid whilst you work for the company, therefore if you were to leave you would no longer be covered.
By considering all of these you will be able to select the right amount of cover for you and your family.
Reviewing your cover on a regular basis will also ensure that your policy offers the right amount of cover. Changes in circumstances such as an increase in salary or having more children will likely require you to take out more cover, or you may no longer require the higher level cover. For example, if your children are no longer financially dependent on you, you are probably paying too much in premiums.