Life can be expensive these days. The list of bills families have to pay is a long one and it soon adds up; there’s the mortgage, council tax, food and energy bills for starters. And then there are often credit card bills, personal loans, transport costs, holidays and perhaps school fees too.

So, if your children, partner or other relatives depend on your income to cover the cost of paying the mortgage, then it makes financial sense to think about the protection and peace of mind that a policy could provide. Being able to claim on a policy could mean the difference between your family struggling to make ends meet and being financially secure. Despite this, many of us simply don’t have any protection policies in place, which is sometimes hard to grasp when you think how vulnerable we all are to ill-health and accidents.

YOUR POLICY OPTIONS

There are various kinds of policies to choose from. Term insurance pays out when the policyholder dies within a set period of time. Term policies come in different forms, such as level term insurance, where the amount of cover remains constant throughout the policy. Decreasing term insurance, where the amount paid out reduces over the term, is often taken out alongside a repayment mortgage, with the sum assured reducing along with the outstanding mortgage debt.

Whole-of-life policies provide cover that lasts a lifetime. This type of policy doesn’t normally have an end date, so premiums are generally paid until you die, at which point the policy will pay out (sometimes premiums end at a certain age, but the cover continues until death).

Some families might need the security of a regular income in the event of the death of a breadwinner; a family income policy which provides a monthly tax-free payment until the end of the agreed term is a good way of securing this.

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.