When you’re a student halfway through your degree course, it’s unlikely that you will have given any thought to the idea of life insurance. You probably have already amassed quite a few debts – through the cost of living away from home and tuition fees. However, you’re less likely to have taken on a mortgage yet.
If you have, though, it might be worth thinking about life insurance to cover the term of your mortgage. Although if you have no dependents when you die, then no one becomes liable for your unpaid debt, it is likely that in the next ten or fifteen years you will have met a partner and maybe had children. In the case that you do have dependants, they will be liable to pay off the rest of your mortgage should you die before clearing the full amount. And the earlier you start your life insurance, the better premiums you will get.
This is particularly true if you choose to take out permanent life insurance. This is where you decide on a guaranteed sum for your dependants should you die. There is no set term on a permanent life insurance policy – it will run until you die. On your death your dependants will a lump sum payment.
There is a temptation to leave these kind of decisions until later in life. This is fine, but you should be aware that buying life insurance when you’re over 50 can be far more expensive than if you put a policy in place when you were younger. People over 50 will find that senior life insurance premiums are high as they have higher risks of ill-health and greater potential of dying within the term of the policy. This means that insurance companies are more likely to have to pay out on a claim than with a younger person who is more likely to outlive the term of their policy (in which case the policy holder receives nothing).
