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No one wants to give the matter too much thought, but there is something very reassuring about knowing that if the worst were to happen, your family would be financially secure. The trouble is, reassurance comes at a price – and the longer you put off starting a policy, the greater that price is likely to be.

Life insurance is designed to let people provide for their families financially when they die. Many people decide they need to take out a life insurance policy when they start a family, or when they buy their first property and want to make sure they would not leave significant debts behind for their loved ones to deal with.

Life insurance can be used to replace lost income, so whoever is left behind can maintain a standard of living.

Funeral expenses, burial costs and medical bills can add up to a large amount. Life insurance can be used to plan for these final expenses and you can choose an amount of cover that meets your needs.

Do I need life insurance?

If you have any form of financial responsibility to someone else, it is likely that you will need life insurance.

There are some exceptions. If you have no debts, own your house out-right, or if you have a large amount of savings or other significant sources of capital or income that could be called on by your beneficiaries in the event of your death, life insurance may not be as necessary.

If you're particularly wealthy you may still require life insurance as a strategy to reduce the impact of inheritance tax for your beneficiaries

In most cases, the minimum amount of life insurance that should be in place should be enough to settle any outstanding debts and cover funeral costs. The amount of life insurance you need depends entirely on your own personal circumstances.

It's generally considered that if you have anyone, especially dependants, who would be financially disadvantaged by your death - i.e. by having to sell your family home due to the inability to keep up home loan repayments, or would be liable for the cost of bringing up your children, - life insurance should be a high priority for you.

It may not be just life insurance that you need. Similar protection products such as critical illness cover make provision for the unexpected so if you don't currently have any financial protection plans in place you should extend your research to cover these areas as well.