If You Drop Dead Tomorrow, How To Make Sure Your Family Doesn’t Go Short

We all go through life and see or hear things that remind us of our own mortality. And as you get older and you don’t have the energy you once have, that invincibility you felt as a teenager and in your early 20s becomes a distant, much-lamented memory!

I could drop dead tomorrow

I had such an experience lately and it made me question myself. I have a wife and kids. I am the only breadwinner in the house. I spent the best part of 15 years’ savings to put together a mortgage to get what my wife calls “our forever home” – where we’ll bring up our 5 year old and 2 year old.

What happened made me start looking for life insurance online. I came across a life insurance compatibility and comparison online tool that I completely recommend and that is very easy to use. It’s not for everyone. However, if you see yourself in any of the descriptions on this page, scroll down and try it for yourself.

Only breadwinner?

That’s me. I bring the money into the house. 100%. All of it.

That money pays for the mortgage, the council tax, food, clothing, toys, Sky – everything. I have about three months’ wages in savings and that’s it.

• Chances of my spouse being able to cover the bills? 0%.
• How long before the family runs out of money and has to put the house on the market? 5 months, tops.

Both bring money in?

Most British households now have two earners in it. Given the price of houses, utilities, food, and more, it’s not surprising. The average household in the UK has £10,200 in savings. (1)

• Chances of one spouse being able to cover the bills in this situation? 0%.
• How will your spouse and kids manage? The house will have to be sold, kids will go to a new school, complete life disruption on top of mourning your passing.

1. Scottish Widows survey, 2014, as reported on the Halifax website

Stay at home parent?

That’s my wife. She does an amazing job of bringing up our kids while I’m out working.
Truth is, I couldn’t do nearly as well or be nearly as patient as she is with the kids and general housework.

• Chances of me being able to cover the bills? 100%.
• How would life change? Other than deeply missing my wife, I would have to get much more of a work-life balance to be the Dad to the kids they need me to be. It would mean a big cut in pay – we’d manage but only just. I never thought about her life insurance before and how I’d need financial support if the worst happened because I couldn’t return to work properly for months, maybe even a year.

Your employer have death in service cover on you?

That’s the sign of a good company. With the average death-in-cover policy paying out four times your salary, your family would receive a substantial sum of money on your death.

However, would it be enough to pay off the mortgage? Probably not – you can’t link death-in-service policies like this to your mortgage. Even if it could, there’d be very little left over.

Life insurance tool

We’re here – this is what I want you to see.

There are two different types of life insurance – whole of life and term (set usually for 5, 10, or 25 years). The amount your policy pays out on your death can be set to stay at the same level or decrease in conjunction with the size of your outstanding mortgage.

If you die, your family is covered. If your spouse or civil partner die, you and the kids are covered. Simple as that.

To me, this isn’t your normal “squeeze-life-insurance-on-as-yet-another-product” mega-comparison site. It’s a clever online life insurance tool designed to be easy to use for people who don’t know their life cover from their elbow.