Our Family Is Growing What Do I Do? Maybe Life Insurance?

Len Burgess[1]

Len Burgess

Money Savings Advice Family is growing, what do I do?

As your family begins to grow, finances will come to the fore, and one, in particular, is life insurance.

  • How can you ensure support for your family in the event of your death?
  • How much is life insurance premium cover acceptable?
  • Should you take advice?

These are all very important questions.

There is nothing you won’t do for your growing family, your children and your partner but sometimes you have to face difficult questions. We all expect to be around forever and enjoy watching our children grow-up.

Life Insurance for My Growing Family

Life insurance offers financial support if you have a growing family. It will ensure that your children and partner are looked after if you were to die unexpectedly. A mortgage will require you to have life insurance cover.

Reality can sometimes be very different, and as you take out mortgages and other debt, how would those remaining cope in the event of your death? It is time to take a look at life insurance for your extended family…..

Read our guide to Life Insurance to see why it becomes incredibly valuable for a growing family.

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Do I Really Need Life Insurance at an Early Age?

The real question should be, can you afford not to have life insurance at an early age? The question becomes even more important if, for example, you are the main income earner for the family. How would your partner cope with mortgage payments if you died unexpectedly?

How would they be able to bring up your children the way you had always planned? Life insurance should be seen as a support mechanism for your family, even if the conversation can be an uncomfortable one to have with your loved ones.

What Kind of Life Insurance Cover Do I Need?

In order to correlate your life insurance payout with your family situation, you need to take into account your overall financial situation. In reality, life insurance should be a consideration when undertaking your annual financial review. It may need topped up, it could be reduced, or you may need to reconsider the whole package if your situation is changing.

How Can I Cover My Mortgage Debt With Life Insurance?

There are many different types of life insurance, and the options will allow you to structure your particular policy around your situation. For example, if you have an interest-only mortgage with the capital due for repayment in 20 years, then you could look towards a 20-year term life insurance policy.

You can structure the policy payout to provide sufficient funds to cover the mortgage capital repayment and a little extra if required. As a consequence, you can all enjoy life in the knowledge that your family will be provided for in the event of your death.

What Is the Best Option, Term Insurance or Whole of Life Cover?

As the description suggests, term insurance is a life insurance policy for a predetermined period. This fits in with the question above, a 20-year term life insurance policy taken out to cover your mortgage repayment in 20 years.

The whole of life cover is exactly what you would expect, in exchange for premiums paid you will receive cover for the rest of your life. It really does depend upon why you are considering life insurance as to which one is more appropriate. Term insurance is more flexible while the whole of life cover is more expensive.

Can We Take Out Joint Life Insurance?

This prompts a very interesting quandary, do you take out individual life insurance on parents as protection for the rest of the family, or do you look at joint life insurance? The premiums on joint life insurance would be less than the combined premiums on two individual life policies.

However, with joint life insurance, there would only be one payment, on the death of either individual, after which the policy would be terminated. There is additional security with two individual policies as the second would continue upon the death of the first person.

Whether or not this is the best route is debatable with income, finances and debt to take into consideration. This is where it starts to get a little more complicated, and advice should be sought.

What Is Death in Service Benefits?

When looking at life insurance policies, it may be worth investigating whether your employer offers death in service benefits. In effect, these are lump-sum payments in the event of an employee’s death while employed by the company. You don’t have to be on company business when you die to benefit from this arrangement. Unfortunately, not all companies offer death in service benefits.

How Much Is Death in Service Benefits?

Death in service benefits are provided by an employer and tend to be between three and four times annual salary. This potential payout is worth considering when reviewing your finances and looking at your life insurance options.

However, you do need to remember that death in service benefits only cover you while you are employed by the company. Therefore, you may need to make alternative arrangements after leaving employment.

What Happens to My Company Pension Entitlement in Early Death?

In general, the beneficiaries named on your company pension scheme members are normally entitled to payments from your company pension if you die before retirement. The arrangement after retirement will also need to be considered because not all pension schemes offer the same level of entitlement.

While this could be seen as a type of insurance policy, it is very important to take advice on this particular subject because there could be tax implications.

Is Life Insurance More Expensive if I Smoke?

Yes. For illustration purposes, we have put together some quotes for 20-year term life insurance spread across different age groups and between smokers and non-smokers.

20-year term insurance:

Age Monthly premiums non-smoker Monthly premiums smoker
30 £5.08 £7.21
35 £6.85 £11.20
40 £9.39 £16.77
45 £13.58 £26.78
50 £20.87 £43.03

The differential in premiums between non-smokers and smokers will give you an idea of what to expect when you request an individual quote for your particular circumstances.

Can I Get Life Insurance With a Pre-Existing Medical Condition?

There may be occasions where life insurance is not possible where there is a pre-existing medical condition. However, it is more likely that the life insurance company would offer cover, but this would exclude your existing medical condition - and any potentially connected conditions.

Failure to reveal any pre-existing medical conditions when arranging your life insurance policy could lead to termination and the cancellation of any cover.

Should I Appoint a Secondary Beneficiary as a Backup?

In the tragic event that partners/spouses were to die in the same accident, this may have implications for the payment of life insurance. Traditionally, one of the partners would be the subject of the insurance policy and the other the beneficiary.

In the event that the beneficiary was not able to take receipt of the payment, this would trigger a train of events. Assuming there was a will in place, the life insurance payment would go to the beneficiary. In the event there was no will, this would go into the estate of the deceased and be distributed to qualified individuals by the court.

As a consequence, it is sensible to have a secondary beneficiary with your life insurance policy. For example, this may be somebody who would manage the funds for the deceased’s children under a pre-agreed arrangement.

Should I Treat Life Insurance as Part of My Overall Investments?

Even today, it is surprising how many people treat life insurance and financial investments/assets separately. There are numerous ways in which you can use life insurance, such as providing basic capital for those left behind and also covering potentially large liabilities, such as mortgages.

As a consequence, it does make perfect sense to treat your life insurance policies as part of your overall investments. This ensures that you can adapt your life insurance cover to your particular scenario.

Can I Change My Life Insurance Cover Further Down the Line?

Many families will arrange life insurance at a relatively early stage and often leave this in place for many years to come. This is despite the fact that their personal and financial situations could change dramatically. As we touched on above, it is sensible to review your life insurance cover as part of your annual financial review.

If you need to extend your insurance cover, you may be able to approach your life insurance provider about tweaking your existing coverage. Alternatively, you may choose to look at a separate life insurance policy which, together with your existing policy, would provide the degree of cover required.

Should I Take Advice From an Insurance Broker?

As we have demonstrated above, there are numerous issues to take into consideration when looking at life insurance. As a consequence, it makes sense to take financial advice from an insurance broker as and when required.

Money Savings Advice Tip

As your family grows it becomes more and more important to make sure your family are protected financially should the unthinkable happen. Speak to a life insurance specialist and get a whole market quote based on your personal circumstances.

What Are Tied Insurance Brokers and Independent Insurance Brokers?

A tied insurance broker has restrictions on the number of life insurance companies with whom they can deal with - usually one particular life insurance group. An independent insurance broker has access to the wider market and therefore, in theory, more choice. There is a common misconception that an independent insurance broker will always be more competitive than their tied counterparts. This is not always the case!

A busy tied insurance broker may be funnelling significant business towards their restricted number of providers. As a consequence, they may be able to negotiate extremely competitive terms and conditions which can match if not better those of an independent insurance broker. Take nothing for granted!


It is natural to want to look after your growing family, although having a conversation about death and life insurance with your partner can be challenging. While we all hope to enjoy a long and fruitful life reality can sometimes be very different. Leaving loved ones facing potential financial ruin is a nightmare scenario, but life insurance offers protection and peace of mind.

How Can Money Savings Advice Help You With Life Insurance?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Life Insurance brokers. They have already helped thousands of people get the best Life Insurance cover and they can do the same for you.

Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these brokers who can provide you with a ‘whole market quote’ then click on the below and answer the very simple questions.

Money Savings Advice Author Len Burgess

Len Burgess

Len Burgess is a professional financial writer who over the last five years has written hundreds of articles for all financial sectors. Len founded Money Savings Advice with the aim of helping consumers navigate their way around the financial world by providing easy to understand financial information and matching consumers with the best financial advisor based on their personal information.

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