Is your family sufficiently protected if you die or suffer a critical illness? for most of us the answer is probably no. Yet in many cases for the price of Sky TV or a mobile phone contract, it is possible to ensure that your family would not face financial hardship if the unexpected happens.

Most families appreciate that they need life insurance but cannot quantify how much. In addressing this, a good place to start is to look at what would happen if you or your partner died, considering the following points:

- How would your income(s) be affected (both parties)?
- How might your expenditure be affected?
- If you have children, how will they be cared/provided for?

The most tangible area to anticipate and quantify is loss of income. You should consider how much income the survivor would need to maintain their standard of living (or at least a good standard of living), and how much income they may continue to receive from other sources (such as their own income). The simplest way to replace income is to take out a family income benefit policy pays a regular income on the death of a life assured for the outstanding duration of the policy term. Family income benefit plans can be cheaper than lump sum death benefit policies, but the payout may be less, particularly in the later years.

It is important to also consider the impact of the loss of a houseperson or non-earning spouse as the impact on family finances can be surprising. Although the survivor may be able to continue working and earning, they may need or wish to reduce working hours to spend more time with the children, or childcare expenses could rise. Insuring a stay at home spouse (usually for a smaller amount) can provide a lump sum or income to cover unexpected expenses or a reduction in income.
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