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Death is a subject that most people don't want to think about. However, it's something that is inevitable and, if you think about the effects of your death, you should at least be considering life insurance.

Unlike most forms of insurance, life insurance is a type of cover where the insured doesn't gain any benefit from the policy. In general, a life insurance policy will only pay out on the death of the insured. However, some policies may include an element of critical illness cover and most automatically provide terminal illness cover and so will pay the benefits when a terminal illness is diagnosed.

Life insurance is generally taken out to provide financial security for loved ones in the event of the policy holder's death. Such an occurrence is always a stressful time and can be made even more difficult if a financial burden results. The aim is therefore to provide financial support at a troublesome time.

The provision of life insurance cover is most important when the insured person has dependants who rely on them for financial support. It may be taken out for many reasons, including paying off an outstanding mortgage or replacing the primary earner's salary so that the family's standard of living is maintained. There may also be a need to continue to pay school or university fees or to fund childcare expenses. Whatever the specific reasons, the general intention is to leave the insured person's family in a state of financial security rather than leaving then saddled with unpaid debts.

If life insurance is taken out, it's important to ensure that the cover is sufficient for what is required. You therefore need to set out the requirements and make sure the level of cover is adequate, not only now but for years in the future. How far into the future is difficult to assess but some of your commitments may diminish - education will finish and the mortgage will be paid off - so the need for life insurance may reduce.

Whatever policy you do take out, it's vital that you keep paying the premiums. Failure to do so will cause the policy to lapse with no value. Since you may be a few years down the line by this time, arranging a replacement will be more difficult as well as more costly.

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