Is Life Insurance Worth It?

Is life insurance worth it?

Published 31 May 2018  |  Last updated 11 May 2022

Life insurance is a subject that some may be reluctant to discuss, but it can be an important subject to think about as you get older or take on more responsibility, whether that be as a parent or a homeowner.

As such, there are many questions that can arise when considering taking out a life insurance policy, such as 'how important is life insurance?', and, ultimately, 'is life insurance worth it?'

To work out what level of cover you may need why not use our life insurance cover calculator?

What does life insurance cover?

Life insurance can offer peace of mind for your loved ones in the unfortunate event of your passing. It is intended to provide financial help to your dependants when they can no longer rely on your income. It normally works by paying out a lump sum to your loved ones or those who are financially dependent on you, which they can use to pay off any debts, such as a mortgage, or to cover everyday expenses.

Is life insurance necessary for me?

If you're single, child-free or have plenty of savings, life insurance may not be a necessary purchase for you, otherwise it may be a very wise move. To determine whether you need life insurance, you may wish to ask yourself a few questions, including:

  • Do I have any dependants who rely on my income such as a partner or children?
  • Without my income, would my partner or children struggle to make certain payments such as the mortgage?
  • Am I a stay-at-home parent who relies on my partner's income?
  • Am I the main breadwinner in the household?

If the answer to any of these questions is 'yes', then life insurance may be worthwhile for you. On the other hand, there may be circumstances when life insurance may not be a necessary purchase for you, such as if you have no children or mortgage, or if your partner earns enough to be financially stable without your income.

There are other circumstances where you may consider it unnecessary, for instance, if you have what's known as 'death in service insurance' benefits through work. However, it's important to evaluate whether the amount provided through this type of insurance is enough to support your dependants and consider what would happen should you change employers.

People who may find life insurance beneficial include:

Is Life Insurance Worth It?

Single parents

As a single parent, you may need to run your household on a single salary, so who would pay the mortgage or other living expenses if you were no longer there? Life insurance could provide you with the peace of mind that comes with knowing your children would be provided for when you're gone.

Sole breadwinners

If you're the main breadwinner in your household, your family may not be able to cope financially without your salary. Life insurance could help replace this lost income should you pass away.

Stay-at-home parents

From housekeeper to taxi driver to cook, a stay-at-home parent has a pivotal role in the daily running of a household. If the worst were to happen to you, could your partner afford to reduce their working hours or give up work completely to take on these responsibilities or hire someone else to do them?

New and existing homeowners

For some of us, a house comes with a mortgage to pay. If you were to die, could your family keep up with the mortgage repayments? Life insurance could ensure that your loved ones will not lose their family home at an already turbulent time.

Full-time carers

If you care for an elderly or disabled relative, who would look after that person if you passed away? Life insurance could help to ensure the right care is put in place when you're no longer around. 

Whether you're a millennial or in retirement, life insurance can cover a variety of different needs, so it's important to find the one that's right for you.

What do I need to consider?

You may find that lifestyle factors, such as smoking or excessive alcohol consumption can affect your premium or the level of cover offered, and you may not be offered cover by some insurers if you have a serious illness. It's important to fully disclose all this information when comparing quotes to help you decide if life insurance is worth it for you.

What are the alternatives to life insurance?

Is Life Insurance Worth It?


You could set aside an amount of money each month to provide a nest egg for your loved ones to support them financially when you're no longer around. There are, however, a couple of issues with this approach. Firstly, you don't know when you're going to die. You may die before you've had the chance to build up an adequate amount of money to support your dependants. Secondly, the amount you would need to set aside each month to accumulate enough cash to cover your mortgage, for example, would likely be far greater than the monthly premiums set out in a life insurance policy.

Selling assets

Your family could sell off your assets such as your house to help cover any expenses. However, at an already difficult time, leaving the family home is likely to be the last thing your loved ones wish to do. A house sale can also take months to complete and your family may need cash quickly to cover your funeral costs, for example.

What are the different types of life insurance?

Life insurance covers a variety of different scenarios, so you need to ensure that you have chosen the life insurance type that best suits your needs and your circumstances.

Here are three of the more common life insurance types:

Level term life insurance

This type of life insurance aims to pay out a specified amount if you pass away at any time during the policy term. For instance, if you were to take out a level term policy for 100,000 for a period of 30 years, 100,000 would be paid out if you passed away at any time during that timeframe. Click on the link to find out more about level term life insurance.

Mortgage protection life insurance

This is also sometimes referred to as decreasing term cover. The amount of cover reduces with this type of policy, usually in line with a mortgage, assuming a fixed interest rate. If you pass away within the term of the policy, the pay-out is designed to cover the outstanding balance of your mortgage, allowing your loved ones to stay within the property without having to worry about covering mortgage repayments. Click on the link to find out more about mortgage protection life insurance.

Critical illness cover

This is an important type of insurance to consider. You need to think, if you become seriously ill and couldn't work, would your family be able to cope financially? This type of policy would pay out in the event of you being diagnosed with one of the policy specified critical illnesses during the policy term. You can choose to have this cover on a level or decreasing term basis. Click on the link to find out more about critical illness cover.

To decide if life insurance is worth it for you, compare life insurance quotes online today!


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