Life insurance is undoubtedly one of the most important insurances sold for the families who have to make a claim on it, and despite being the insurance policy no one wants to ever have to claim on, the benefits it brings can be so important to a family’s finances.
Life insurance is sold to those with financial responsibilities, whether that be young children, a mortgage, or that the person is the main earner in the family and that without them the family would be unable to continue living comfortably.
The policy will pay out in the event of the death of that customer and the money can be used to pay off a mortgage, help raise children financially, or in many cases, both.
The problem with life insurance is that throughout the lifetime of a policy, the customers circumstances will often change, and this could be just getting married, to something as important as having a child. It’s also important to notify the insurance company if you are diagnosed with a serious illness.
Each change however can massively affect what sort of cover you need, and how the insurance policy pays out. Someone with an extra child for example may need to increase their life insurance payout, to account for the fact that the child will cost tens of thousands of pounds over its lifetime, money that could be impossible to come by if the customer was no longer around to earn the money.
Whilst many policies are taken out at the same time as the first mortgage, it’s important to notify the insurance company every time you move house or remortgage your home, as this could affect your policy.
In a worst case scenario, some families find that when the family have tried to make a claim when the customer dies, they have been unable to because details have not been updated and the insurance policy is no longer valid.