What’s the Value on Your Head?
Have you got life insurance?
As a landlord, you’ve got the legal things you need, Gas Safety Certification, EICR and EPC. You’ve probably also got Home Emergency Insurance, in case of any issues in your property. Maybe you’ve even got Rent Guarantee Insurance, to cover any missed or part payments. But have you got life insurance?
Home Emergency Insurance for £130
- ✓ Covered up to £1,000 per emergency
- ✓ £250 for overnight accomodation
- ✓ Call out, labour & parts included
Your own death is probably not something that you want to think about, but you really should. Life insurance is a much needed part of your landlord kit because it protects your family in the event of your death by covering:
- Funeral costs. The average funeral in the UK can run into thousands of pounds, so ensuring this cost is covered can give you and your family peace of mind
- The mortgage. You won’t have to worry about your family making the mortgage repayments each month as your life insurance should clear this, ensuring your family’s home is safe and protected no matter what
- Other outstanding debts. If you had any loans or credit card debts, your life insurance ensures that your family don’t have to continue paying off any debts incurred in your lifetime
- Additional support. Anything left over once the above is covered goes to your family. This could be spent on covering higher education fees or even deposits on homes
Essentially, life insurance is your way of protecting the people you love and what you’ve built in your lifetime. Our fantastic insurance advisors can help you figure out the right route for you, so be sure to book a call with them to discuss in more detail.
When should you get life insurance?
We say the earlier the better! The younger and fitter you are, the lower your premiums are likely to be. But there are some major life points when getting life insurance should be top of your mind:
- When you buy a home. When you get your first mortgage, you will probably be recommended life insurance. While this is not a legal requirement for getting a mortgage, it’s highly recommended as you now have a large legacy to leave and you will want to make sure that whoever may inherit it doesn’t have to worry about mortgage repayments
- When you get married. When you get married, you’ll probably be tying up a lot of your finances by opening joint accounts for shared expenses if you haven’t done so beforehand, so it’s worth considering life insurance at this point. This way, your spouse isn’t left with any debts that you may have incurred in your lifetime and you will know they will be financially stable in your absence
- When you have children. Even more so than a partner, you are going to want to know that your kids are ok in the future, no matter what might happen to you. While the hope is that you will be around for a long time, no one has a crystal ball, so set up a life insurance policy when they are born, aim to include critical illness cover, to make sure they will be looked after financially if you’re not around to ensure it
- When you invest. Now you are a landlord, with buy-to-let mortgages, you have even more of a legacy to leave than just your own home. So you want to make sure that your investments don’t become a burden on someone else
You can also get life insurance when you retire, but the older you are, the higher the premiums will be. It’s also worth getting life insurance as young as you can, and including critical illness cover.
Much as no one wants to think about dying, no one really wants to think about getting sick either. But it can and does happen and if you have critical illness cover included in your life insurance, this will pay out when you need it most.
How much is a life insurance payout?
There’s no fixed formula for calculating what the payout might be, as it depends on your age and general health and the type of cover you choose:
- Whole of Life Insurance. Pays out no matter when you die
- Level Term Life Insurance. Fixed term and will only pay out if you die in the fixed term period
- Decreasing Term Insurance (Mortgage Life Insurance). A cheaper policy that has a payout that decreases every year, in line with that’s left on your mortgage
- Increasing Term Insurance. The payout is tied to inflation or to a fixed percentage, so the payout should increase each year
- Renewable Term Insurance. Cover for a fixed period that can be easily extended
- Joint Life Insurance. Taken out with a partner and will only pay out once – the surviving spouse will not continue to be covered
You will be asked your age and then you’ll be asked various questions about your health and lifestyle, like:
- Are you a smoker?
- Do you have any pre-existing conditions?
- Do you take part in any risky hobbies like mountain climbing?
The type of insurance you choose and the answers to these questions will determine your premiums and payout.
We highly recommend checking in on your insurance regularly too – don’t just forget about it! Your circumstances might change and you might wish to look for a better deal, so make sure to check in with your insurance advisor regularly to get the right deal for you.
