Why you shouldn’t cancel your life insurance during the cost-of-living crisis

With the UK’s current cost of living reaching a 40-year high and many other countries also struggling from high inflation, many people are trying to save money where possible. 

Some are cutting back on luxuries, others are having to make the hard choices between food or electricity, petrol or heating, paying off debts or having fun living life, and whether any monthly payments leaving their accounts are absolutely necessary.

With global inflation looking set to increase further, you may be in a position where you’re considering cancelling your life insurance policy. After all, if you need money to survive now, then what good is it going to be when you’ve passed away? 

However, there are multiple reasons why life insurance is so vital, especially during turbulent periods…

Putting your family first

If you’ve already secured life insurance, chances are your family were the primary reason. After all, the basic concept of life insurance is to pay out to your loved ones if you were no longer around to provide. While this can never replace the family’s loss, it could help financially with the transition of a life without you. 

You may have monthly mortgage payments or rent your family need to cover, and the days of cheaper rates are slowly drifting into a distant memory for people renewing these contracts. It’s difficult for a couple to afford a property, let alone one person who’s now potentially also juggling work and raising children. 

Then there is the rapid increase of day-to-day living costs. With the cost of electricity, gas, food and petrol all hitting the news in the last 6 months, your pay cheque is having to stretch further than usual for the family basics.

If you’re not around, could your family cope with the additional strain – or would their quality of life suffer?

The scariest thing is that forecasts are predicting things to get worse before they improve. Having a contingency plan in place can alleviate some of the financial issues if the worst should happen. See our term insurance calculator article here to see how much cover you require.

No-one can predict the future

There are both positive and negative occasions you may get some warning about. If you’re welcoming a new addition into your family, you usually have months to prepare. Or maybe your employment is to be terminated and you receive a severance to help you for the next couple of months.

However, the unexpected is where life insurance can come to the rescue. According to UK insurer SunLife, the average cost of dying is currently £8,864. However, with inflation increasing, your family may have to find more money to cover your funeral costs. If your family didn’t have that sort of money to hand, life insurance could cover this expense.

You may even be able to secure enough money to provide your dependents with an inheritance too, or to help your partner retire depending on their age.

With costs almost as hard to predict as the future, life insurance can make sure your family don’t ever get caught out - providing an invaluable safety blanket.

Illnesses are impacting us all more

We know that Covid-19 ground the world to a halt, and we are all still dealing with the ramifications of navigating our post-pandemic world.

As a result, many of us have had to come to terms with our own mortality after losing loved ones and seeing terrifying statistics on the news most evenings.

But the lockdowns have also resulted in some of our immune systems being incapacitated to a degree. The lack of recent exposure to common respiratory viruses or seasonal illnesses thanks to protective measures is a double-edged sword.

Combined with current pressures on the NHS in the UK, there is the potential for common illnesses to develop into more severe cases.

There’s also the mental health aspect when life is filled with stress and uncertainty. Your mental health can impact your physical health and exacerbate it in many ways.

While many of us feel like we have no choice but to keep going, life insurance can provide a little peace of mind, knowing that if you do get seriously or fatally ill, your family have options to help them continue.

Some life insurance policies include terminal illness over or allow you to add critical illness cover, which can support you and your family if you’re diagnosed with a life changing, or fatal illness you will succumb to. With everything going on, you cannot underestimate…

The importance of life insurance

Having reassuring peace of mind that your loved ones will be supported financially whatever the future may hold is invaluable.

That’s why Reassured, the UK’s biggest life insurance broker, are determined to help as many people as possible secure life insurance protection. They compare the best life insurance providers free of charge to ensure you secure the right policy, at the best price.

For our US audience check out the best available insurers in this comprehensive 2022 review from USNEWS.com.

Applying for life insurance doesn’t need to be a scary or uncomfortable process either. If you have many questions, don’t worry - a regulated broker can provide you with multiple no-obligation quotes and walk you through the application process. You can get a free quote for life insurance here.

So next time you’re looking at where you can make cutbacks, don’t sacrifice your life insurance unless absolutely necessary, as down the line, your loved ones may very well need to fall back on your selfless investment.