Who genuinely needs life insurance?
Life insurance exists to replace your income and/or pay off your debts if you die — protecting the people who financially depend on you. You need life insurance if any of these apply:
You have dependants. If you have children, a partner who relies on your income, or anyone else who would face significant financial hardship if you died, life insurance is essential. The purpose is to replace the financial contribution you make to their lives.
You have a mortgage. If you die with an outstanding mortgage, your estate still owes the debt. Without life insurance, the property may need to be sold to repay it — potentially making your family homeless. Mortgage protection (decreasing term life insurance) is designed specifically for this.
You have significant other debts. Personal loans, credit card debt, and other liabilities don't automatically disappear when you die. They're paid from your estate before anything is passed to beneficiaries.
Who might not need life insurance?
Life insurance may be less important if: you have no dependants and no significant debts; you have substantial savings or investments that could support your family without your income; your employer provides a significant "death in service" benefit (typically 3–4x salary); or you're financially independent.
How much life insurance do you need?
A common starting point is 10x your annual gross salary, though the right amount depends on: your outstanding mortgage balance; other debts; the number and ages of your children; your partner's income; your existing savings; and whether you want to provide an ongoing income or a lump sum.
A life insurance broker will assess your full financial picture and recommend the right amount. Over-insuring wastes money on unnecessary premiums; under-insuring defeats the purpose.
What type of life insurance do you need?
Term life insurance covers you for a fixed period (e.g., 25 years). Pays out if you die during the term. Most common and most affordable. Suitable for most family protection and mortgage protection needs.
Whole of life insurance covers you for your entire life and is guaranteed to pay out eventually. More expensive, typically used for inheritance tax planning.
Level term pays a fixed lump sum throughout the term. Decreasing term reduces in line with a repayment mortgage and is cheaper.
How much does life insurance cost?
A healthy non-smoker aged 30 can typically get 25 years of £500,000 level term cover for £15–25 per month. Premiums increase with age, smoking status, and health conditions. Getting quotes through a whole-of-market life insurance broker ensures you're comparing the full market — not just one insurer's prices.
The bottom line
If people financially depend on you, you need life insurance. It's cheaper than most people think, and the cost of not having it can be devastating for the people you leave behind. Nesto matches you with an independent life insurance broker who compares the whole market to find the right cover at the right price.