At these prices, life is cheap
Death may be unpalatable, but for relatives, penury can make the loss much worse.
Life cover is a way to ensure that your family would be able to cope financially if - excuse me for mentioning it again - you were to die. Anyone with responsibilities knows the importance of life assurance, but around of third of British adults have no cover at all.
But, as our table shows, it costs from just a few pounds a month to set up a simple policy which will pay cash to your dependents if you die. Our figures are based on cover for pounds 50,000 but most people will want to get more cover than that.
Why? If you are the breadwinner, or one of them, you should see life assurance as a way of ensuring your loss doesn't hit your family's finances. The aim should be to replace your income, or to provide enough income to meet their future needs. The simplest and cheapest life policy is term assurance which you pay into for a certain period, and which pays out if you die within that period.
The policies pay out a lump sum on death so you need to ensure that the amount is enough to generate an adequate income for your family. For instance, if you earn pounds 30,000 a year, you should aim to have life cover of pounds 600,000. Why so high? To guarantee an annual income of around pounds 30,000 from your life assurance payout, based on the assumption that you should be able to get a 5 per cent return on your investment. If you think in the future your dependents may be able to get a 10 per cent return on an investment, then you would need to buy only pounds 300,000-worth of life cover to get a pounds 30,000 income.
Do the sums based on your own salary. Of course you may feel that your family may not need as much as you earn, particularly if some of their outgoings may be reduced on your death. You may have mortgage replacement insurance, for instance. If so you should work out their future outgoings and work out your life assurance needs accordingly.
Alternatively you could list your debts first, including the mortgage, and start by getting enough life assurance to cover them, leaving your family with a financial clean slate. Remember to include all loans or other credit debts you may have if you follow this approach. Then you should consider just how much your family would need to live on in a debtless environment and working out your life assurance needs accordingly. If both partners work then both should be covered to an appropriate level, as the loss of either income could lead to a financial strain.
The costs of assurance will depend on a number of issues. Your age, of course, will be a determining factor, as will your sex. Since females are statistically likely to live longer than men their life cover is cheaper.
You health will play a big part in determining the cost of cover but as long as you are reasonably healthy, you shouldn't need to undergo a medical to get life cover, unless the insurance company demands it because of your age.
However they will not take it on trust and you will need to supply a note from your doctor attesting to your general condition. As you can see from the table, costs vary considerably between insurers with, in some cases, cover costing as much as three times more. This means that it is sensible to shop around - but it is equally important to check the small print. Some polices may have exclusions or omissions which concern you. Exclusions could be anything which render the policy invalid and it is important to understand what they are. Omissions could be inadequate cover - for instance, some more expensive policies pay out immediately if you are diagnosed with a terminal illness and have less than 12 months to live.
Getting the right cover is important so you should make sure you understand what is being offered. You may want to take expert advice to ensure you do not make a mistaken
Life cover - what it costs
Lowest and highest monthly premiums for pounds 50,000 of level term assurance for a non-smoker. Lowest rates in all cases were from Equitable Life; Highest rates quoted came from various providers as shown
Male aged 30 pounds 3.75 (Equitable ) pounds 12.00 (Winterthur)
Female aged 30 pounds 2.67 (Equitable) pounds 11.00 (Ecclesiastical)
Male aged 40 pounds 6.65 (Equitable) pounds 20.00 (Ecclesiastical)
Female aged 40 pounds 5.33 (Equitable) pounds 16.00 (Ecclesiastical)
Male aged 50 pounds 16.75 (Equitable) pounds 39.50 (NM Life)
Female aged 50 pounds 12.03 (Equitable) pounds 37.50 (Scot.Friendly)
Male aged 30 pounds 4.16 (Equitable) pounds 12.50 (Winterthur)
Female aged 30 pounds 3.11 (Equitable) pounds 11.00 (Ecclesiastical)
Male aged 40 pounds 8.42 (Equitable) pounds 22.00 (Ecclesiastical)
Female aged 40 pounds 6.35 (Equitable) pounds 17.50 (Ecclesiastical)
Male aged 50 pounds 21.94 (Equitable) pounds 46.50 (Winterthur)
Female aged 50 pounds 14.80 (Equitable) pounds 40.00 (Utd. Friendly)
Male aged 30 pounds 4.91 (Equitable) pounds 13.50 (AXA E&L)
Female aged 30 pounds 3.62 (Equitable) pounds 13.50 (Utd. Friendly)
Male aged 40 pounds 10.56 (Equitable) pounds 26.00 (NM Life)
Female aged 40 pounds 7.64 (Equitable) pounds 24.00 (Utd. Friendly)
Male aged 50 pounds 27.94 (Equitable) pounds 60.00 (NM Life)
Female aged 50 pounds 18.36 (Equitable) pounds 56.50 (Scot. Friendly)
25 July 2014 11:00 PM
A London estate agent yesterday put a price on having a garden. David Pollock of Greene & Co reckons it can increase a property's value by a tenth.
Problem gambling: Amid heavy advertising and a surge in remote sports betting, more and more 16 to 24-year-olds are now seen as 'at risk'
25 July 2014 11:00 PM
25 July 2014 11:00 PM
Payday loan firms have been accused of bombarding financially vulnerable people with nuisance phone calls, after a debt charity reported that a third of its clients were plagued by the messages.
24 July 2014 12:00 AM
A plan to defuse a “mortgage debt timebomb” when interest rates rise is published today amid warnings that 2.3m households could struggle with their repayments.
Current accounts are too costly and confusing, says CMA as it announces investigation into Britain's biggest banks
19 July 2014 12:00 AM
19 July 2014 12:00 AM
11 July 2014 12:20 AM
11 July 2014 12:20 AM
How would you like to be able to choose how your electricity is made and even where it come from? It may sound futuristic and fanciful but the independent supplier Co-operative Energy has made it a reality this week.
11 July 2014 12:20 AM
04 July 2014 03:49 PM
MPs want medical evidence for claims. Will this bring higher premiums?
04 July 2014 11:00 PM
British Gas was yesterday forced to pay back £1m to its customers after mis-selling them energy deals.
- 1 Malaysian cyclist could face disciplinary action after 'Save Gaza' gloves protest
- 2 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 3 Fifty Shades of Grey trailer provokes moral outrage from US parenting groups
- 4 McDonald’s removes chicken nuggets from the menu in Hong Kong amid major food scare
- 5 Students offered grants if they tweet pro-Israeli propaganda
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
John Barrowman praised for Commonwealth Games opening ceremony gay kiss
iJobs Money & Business
£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...
£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...
Day In a Page
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar