At these prices, life is cheap

Death may be unpalatable, but for relatives, penury can make the loss much worse.

Wasn't it shocking that the Grand National was delayed? Do you think Manchester United will win the championship again? Who will win the election? Have you seen the comet? We'll think about anything rather than consider our own mortality. But if a tragedy did happen to you, you would not be the only one to suffer. How would your family cope, not just emotionally, but financially? Unless you have taken steps to protect them, your loss could prove to be just the beginning of their troubles.

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

Low High

10-year term

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)

15-year term

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)

20-year term

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)

Source: Moneyfacts

News
people
News
people And here is why...
News
peopleStella McCartney apologises over controversial Instagram picture
Arts and Entertainment
Richard Burr remains the baker to beat on the Great British Bake Off
tvRichard remains the baker to beat as Chetna begins to flake
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
The village was originally named Llansanffraid-ym-Mechain after the Celtic female Saint Brigit, but the name was changed 150 years ago to Llansantffraid – a decision which suggests the incorrect gender of the saint
newsWelsh town changes its name, but can you spot the difference?
News
i100
Sport
footballLatest scores and Twitter updates
Arts and Entertainment
Amazon has added a cautionary warning to Tom and Jerry cartoons on its streaming service
tv
Life and Style
Couples who boast about their relationship have been condemned as the most annoying Facebook users
tech
Arts and Entertainment
Hayley Williams performs with Paramore in New York
musicParamore singer says 'Steal Your Girl' is itself stolen from a New Found Glory hit
Finacial products from our partners
Property search

Simon Read: The timeshare battle intensifies with Macdonald Resorts

An action group of disaffected Macdonald owners are now readying for their own legal battle with the company

Debt problems: How you can nip your money problems in the bud and sleep easy at night

Money worries are keeping more than 7 million of us awake at night

Venture Capital Trusts: You will love the tax-free income

To encourage investment in this higher-risk area, the Government offers generous tax relief to those who invest in new issues of VCT shares

Runaway debt: It's the new norm for university students now

StepChange, the debt charity, has revealed that students who called its helpline in 2013 had racked up average debts of £7,818

Michael's crisis could have 'dragged on for a long time', says CPA adviser Ruth Millward, right

More than 300,000 adults are too deeply in debt to apply for bankruptcy

Charities are urging the Government to offer a cheaper alternative for people in financial difficulty

Scottish independence: How will kilt-edged stocks fare?

Scottish companies were caned when the separatists surged in the polls. Is this the future, asks Simon Read, and would they be any better together?

Two million first-time buyers are locked out

The drought in lending to people with low deposits has created legions of frustrated buyers, writes Emma Lunn

Leaving money to charity in your will could help reduce the tax bill for your loved ones

Next week has been designated "remember a charity in your will week", to put the focus squarely on the subject
Money is slipping through our fingers: the UK is falling behind other countries in the amount we put away

How to save money: UK is crashing down the European league table for putting money away

The UK has slipped to 11th in the latest European league table of savers. Rob Griffin checks out the best options

Energy firms found guilty of bad practice could have licences revoked under Labour government

Caroline Flint, the shadow energy secretary, says a Labour government would create a new energy regulator

A student's guide to financial survival: You don't have to drown in debt at university

Fresh from A-level delight, the moment does not have to be soured by students resigning themselves to thousands of pounds worth of debt in three years' time. Rob Griffin sees how to pass the university challenge

'Dismal' eurozone data sparks concerns

European Central Bank chief Mario Draghi is under pressure to launch promised stimulus before the EU slides further
Love but not marriage: property is one area where cohabiting couples are in danger of losing out

How couples can protect their financial interests when cohabiting

People who simply live together cannot assume they have the same rights to each other's assets as spouses or civil partners. Michelle McGagh sees how they can protect their financial interests
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

    Trust Accountant - Kent

    NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

    Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

    £18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

    Law Costs

    Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

    Day In a Page

    Italian couples fake UK divorce scam on an ‘industrial scale’

    Welcome to Maidenhead, the divorce capital of... Italy

    A look at the the legal tourists who exploited our liberal dissolution rules
    Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

    Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

    The vintage series has often been criticised for racial stereotyping
    Llansanffraid is now Llansantffraid. Welsh town changes its name, but can you spot the difference?

    Llansanffraid is now Llansantffraid

    Welsh town changes its name, but can you spot the difference?
    Sistine Chapel to ‘sing’ with new LED lights designed to bring Michelangelo’s masterpiece out of the shadows

    Let there be light

    Sistine Chapel to ‘sing’ with new LEDs designed to bring Michelangelo’s masterpiece out of the shadows
    Great British Bake Off, semi-final, review: Richard remains the baker to beat

    Tensions rise in Bake Off's pastry week

    Richard remains the baker to beat as Chetna begins to flake
    Paris Fashion Week, spring/summer 2015: Time travel fashion at Louis Vuitton in Paris

    A look to the future

    It's time travel fashion at Louis Vuitton in Paris
    Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

    The children orphaned by Ebola...

    ... then rejected by surviving relatives over fear of infection
    Pride: Are censors pandering to homophobia?

    Are censors pandering to homophobia?

    US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
    The magic of roundabouts

    Lords of the rings

    Just who are the Roundabout Appreciation Society?
    Why do we like making lists?

    Notes to self: Why do we like making lists?

    Well it was good enough for Ancient Egyptians and Picasso...
    Hong Kong protests: A good time to open a new restaurant?

    A good time to open a new restaurant in Hong Kong?

    As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
    Paris Fashion Week: Karl Lagerfeld leads a feminist riot on 'Boulevard Chanel'

    Paris Fashion Week

    Lagerfeld leads a feminist riot on 'Boulevard Chanel'
    Bruce Chatwin's Wales: One of the finest one-day walks in Britain

    Simon Calder discovers Bruce Chatwin's Wales

    One of the finest one-day walks you could hope for - in Britain
    10 best children's nightwear

    10 best children's nightwear

    Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
    Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

    Manchester City vs Roma

    Five things we learnt from City’s Champions League draw at the Etihad