Why life insurance still matters, even in a cost-of-living crisis

Why life insurance matters now

These days, lots of households are feeling the pinch. Food costs more, energy prices are higher, most things seem to be more expensive, and there’s still the mortgage or rent to pay. It makes sense to spend less if you can.

But while cutting back may be necessary, cancelling your life insurance could be a costly mistake. It protects your family if something happens to you, helping cover mortgage or rent payments, household bills and everyday essentials, pay for your funeral or provide future support for your children. Without this help, your family could struggle financially if the worst happens.

Even if your circumstances change, such as you’ve paid off your mortgage, you’re divorced or you don’t have a family, life insurance can still help tie up your financial affairs or leave a gift of a lump sum payout.

What to do if you don’t already have life cover

If you don’t have life insurance yet, it’s still worth getting. Even a small policy can give you and your family peace of mind. If something happens to you, the money from your insurance could help your family pay for important things.

Even if you live alone or don’t have children, life insurance offers a way to tie up any debts when you’re gone. It can also help pay for things like funeral costs.

Life insurance doesn’t have to cost a lot. In fact, it’s often cheaper if you get it when you’re younger. You can pick a plan that suits your needs and budget.

At Post Office, we understand the pressures families are under. And we can help you put cover in place to protect what matters most and suit your budget.

Check how much cover you might need with our life insurance calculator.

Why cancelling your life insurance could be costly

If you already have life cover, you might think stopping your policy will save you money now. But it could end up costing you more later. Here’s why:

• When you first took out your policy, your monthly payments were likely cheaper because you were younger and in better health. Life Insurance is typically more affordable when bought earlier as age and health are some of the key factors used to determine your monthly premiums
• If you cancel now and reapply later, you could face higher premiums because you’re older or may have health conditions you didn’t have before
• You might even find it difficult to get cover again if your health changes significantly

Even taking a short break from your insurance could mean losing important benefits and the lower premium you pay now. But that doesn’t mean you can’t make changes to ease the financial burden.

Getting help if you’re struggling to pay

If you’re finding it hard to pay for your life insurance, you don’t have to cancel it straight away. Post Office and other insurers offer ways to help you keep your cover under the Financial Hardship Policy. This seeks to identify genuine financial hardship and offer flexible support for those facing it.

Ways to help may include:

• Changing payment dates: You may be able to move your payment date to give yourself more time to pay
• Changing your cover amounts: You might also be able to lower your policy’s payout amount to reduce the monthly premium, then put it back up if your financial situation improves

Some other options with Post Office Life Cover are:

• Payment flexibility: Your policy’s designed with built-in flexibility, allowing you to manage your payments in a way that suits your circumstances without affecting your cover
• Missed payments: If you miss a payment, your cover won’t stop right away. We’ll call you and send you a letter to see what’s happened. When the second payment is due, we’ll try to take a double payment. This effectively gives you one extra month to catch up. During this time, your cover still applies and you can still claim if you need to. We’ll only cancel your policy if you miss two separate monthly payments

Remember, talk to your insurer before cancelling or making any changes to your cover. They’re often able to help more than you expect. They’ll let you know what changes they can allow and whether it will change the price.

Before you cancel, talk to us

Your life insurance policy is there to protect your family’s financial future. If you have a Post Office Life Insurance policy and you’re struggling to pay your premiums, don’t cancel without speaking to us first. We’re here to help you find a solution that works.

Find more information on our help and support page

There are also a number of organisations you can contact for help with money worries.

Extra support from Post Office

Sometimes the support you need might be more than just financial. And, when you have Post Office Life Cover, you also get free access to health and wellbeing services.

These extra services support you and your family while your policy is active and include:

• 24/7 GP consultations online or over the phone
• Physiotherapy sessions
• Bereavement counselling
• Nutritional and lifestyle advice

They’re designed to help you every day, not just in difficult times. And while they’re separate from the policy contract and may be withdrawn at any time, they’re valuable additions.

Read more about our health and wellbeing services