“I don’t need life insurance; I’m not going to die!”

Quite correct, if you’re not going to die, you don’t need life insurance. If this applies to you, please skip the rest of this section.

"Anyway, even if I do die, my family will be allright because of the money they'll get from my company pension scheme."

With the turmoil in occupational pensions these days, can you guarantee that allowing your family to rely upon your company pension is completely risk free?

And did you know that many company pensions sentence the widow or widower to live the rest of their life on their own by stopping their pension if they remarry or even just share a home?

“But there's always the state, it will look after my family if I die!”

But will it?

The state may pay “Widowed Parent's Allowance” this is for widowed parents bringing up children based on their late husband or wife's NI contributions.

If you are bringing up at least one child or are expecting your late husband's baby and are the widow or widower of someone who has paid NI contributions, you may be able to claim Widowed Parent's Allowance.

“Good – that’s sorted then!”

But is it? Unfortunately, you cannot get any state bereavement benefits, including “Widowed Parent's Allowance” in any of the following circumstances:

• You are already divorced when your ex-spouse dies
• You are not legally married – “common law” spouses do not qualify
• If you remarry
• If you live with someone else as their partner, even if you don’t remarry

“None of that will happen to my spouse, so they’ll be all right!”

But will they?

In the tax year 2005-2006, Widowed Parent’s Allowance is only £82.05 a week.

(If you’d like more information on state bereavement benefits, please click here.)

“That’s not much is it? Perhaps thinking about some cover to look after my family may be a good idea after all, but isn’t it expensive?”

No it isn’t – depending on your needs; it may be possible to arrange adequate cover for less than £10 a month.

“I already have life cover, so I don’t need to look at it again”

Are you sure?

Will it pay off your current mortgage and any loans?

Has your family grown since you took out the cover?

Have your earnings increased substantially – which your family would lose if you died - since you took it out?

And finally, is it in trust?

“Hang on a minute, what’s a trust?”

Unless a life insurance policy is in trust, the Inland Revenue is almost certain to take 40% of the payout.

“What are you talking about? My adviser never said anything about that!”

Perhaps due to the extra work involved and the complex nature of trusts, we have found that many life insurance policies are not routinely placed in trust.

“OK – I give up! What do I do next?”

To contact us for a review of your family life insurance, without any commitment or obligation on your part, please call 01978 313420, complete the contact form, or E-mail NWIA.