Those with children, a business or other responsibilities should arrange an appropriate amount of life assurance

Insurance is a fairly modern development but it allows one to avoid a disaster for a relatively small regular payment – whether the disaster is a car wreck, the house burning down, or the death of the sole income-earner in a family with young children. Usually it is easy to work out how much insurance is required. In the case of life assurance it is usually approached as to what amount would be needed to replace the income of the deceased person, or, in the event of a house-person, what it would cost to cover all of the work that person does. This can be surprisingly large, with some research putting the equivalent cost for a house-person with children at as much as £25,000 to £30,000 a year, not including love and affection!

Life assurance is now available to many people who might have been turned down in the past because of some medical situation. It may cost more but it is worth checking it out. For example, we were surprised to learn recently that life and travel cover is available for those who have had breast cancer – on a case by case basis.

If you have a business, you do need to have a plan “just in case”. The loss of the business owner or a key person could be disastrous. Life cover could keep the business afloat while it is sorted out. A common calculation for this type of cover is five times the owner’s or the keyman’s earnings.