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When You Need Life Cover and When You Don't

Who Needs Life Insurance?

This depends on many factors. But, age, occupation and the level of major debt (e.g. a mortgage) are amongst the most important ones for anyone looking to take out a life policy, as well as the main reason for considering life insurance in the first place.

Age, Occupation and Financial Commitments

Generally, people with school age dependants and a partner who relies on their income for all expenses including mortgage or rent payments would generally be best advised to get a life insurance policy to provide for them in case of their death or critical illness.

Unfortunately not all people in this category can afford life insurance due to having a low income or too many other financial commitments that can’t be cancelled. However, the cost of life insurance has plummeted in recent years and in many cases it won’t cost as much as people envisage.

So, it may benefit young people to consider a long term life insurance (e.g. 30 years), as the cost will be low for relatively large cover. It would also be advisable for a family with the main income earner in potentially high risk occupation, e.g. pilots, lorry drivers, construction workers, whether with young children or just the partner to consider sufficient life cover to meet their financial obligations in case of death or critical illness.

Other Important Factors

The above are significant matters that individuals looking at life insurance must consider. However, there are other relevant points that must also be taken into account prior to committing to the regular monthly premiums of a life policy.

These can be listed, in no particular order, as follows:

  • Age of policy holder – the younger the person the lower the premiums
  • Individual or joint policy – most couples would consider a joint policy that pays on the death of either party within the term of the policy
  • Length of cover – depends on the age and what the life policy is to cover, e.g. it would have to be the same term as a mortgage it covers
  • Level or decreasing cover over the term – the latter is ideal for a repayment mortgage, where the original borrowed capital decreases over the term of the loan
  • Whole of life – the policy will pay out whenever the policyholder dies, as long as they keep up with their premiums
  • Level of cover – this is dependent on the level of financial commitment the policyholder wants to be able to repay in case of their death, e.g. an interest-only mortgage
  • Payout due to terminal illness – some policies will include this feature, but will obviously have a higher premium.

When You Need Life Insurance and When You Don’t

In the majority of cases a young single person starting in life with hardly any financial commitments wouldn’t need any life cover and their employer may already include some degree of life cover. However, a similar case can’t be made for a young single-earner family with a mortgage, as it would be advisable to cover the repayment of the debt with an appropriate level of life insurance to ensure the debt is fully repaid in the event of their death and they can leave an additional lump sum above the total debt.

The premiums for life insurance tend to increase with the age of the applicant. So, as an example, the monthly premiums for a £100k cover for a 25 year old single person over 30 years could be as low as £15, but the same cover for a 40 year old single person could be as high as £55.

Unfortunately in these times of major cutbacks and austerity measures by individuals and families, it is regular outgoings like life cover that get cancelled first to reduce the monthly financial commitments.

How to Decide About the Level of Life Cover

Apart from the monthly premiums limiting the total cover being considered, the potential policyholder should review their total life insurance requirements for the next 20 to 30 years based on their financial commitments that must be covered in case of their untimely death.

As a writer focused on the insurance services domain David Nealson has written many comprehensive analyses and reviews that help individuals better understand the insurance plans they are offered. Take a look at his latest overviews revealing all features of the Liverpool Victoria life insurance and HSBC life insurance plans.



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This website is owned by Mediamash (NI) Limited, who are an Introducer Appointed Representative of Seopa Ltd. The quote system is owned and operated by Seopa Ltd, who are authorised and regulated by the FCA, number 313860. You can view our registration at We do not give financial advice on this website. If in doubt get professional advice and always read the policy information before purchasing an insurance contract.