Life insurance provides peace of mind that your family and dependants will be looked after financially should the worst happen. It’s very rarely discussed and is often seen as an awkward topic, of course, nobody likes to think about such things. However, life insurance is very often misunderstood, so we have exposed some of the most common myths around life insurance so you can make up your own mind.

1. The premiums are really expensive. If you think your life insurance premium is going to break the bank, think again. Of course, this is subjective but life insurance can start from as little as £4.50 a week!

2. A serious illness = rocketing premiums. Wrong. Your premium is based on your health at the time you take out the policy. Just make sure you’re completely honest with your insurer about your health in your application form.

3. You’ll need to be credit checked. No credit check is required for an insurer to provide you with cover. If at any point you can no longer afford it, then you simply stop paying them and the policy and cover will end.

4. You don’t need it if you’re not working. Even if you’re not the breadwinner, you need to consider the financial impact your death could have on your family. For example, if you take care of the children while your partner works, you will need to cover childcare costs.

5. Credit card debts disappear when you die. When you pass away, unfortunately debts don’t disappear. Your estate will have to repay your debts before anything is passed to your beneficiaries. If your debts outweigh the total of your estate, a credit card provider cannot pursue anyone else for your individual credit card debts.

6. Most of your insurance pay-out goes to the taxman. Technically, your pay-out is subject to inheritance tax. However, if you have the policy written ‘in trust’ the proceeds are paid into a trust and aren’t considered a part of your estate so aren’t subject to inheritance tax. The trust is managed by a family member or solicitor who will be known as the ‘trustee’.

7. There’s no point if you don’t have children. Not true. If you have a spouse who is dependent on your income, it can really help should the worst happen. Without a combined income, paying the bills may prove to be a struggle for your other half. A pay-out can prevent spiralling debt while your significant other gets back on their feet.

8. Life insurance does not pay out for suicide. This can differ between insurers, but generally speaking, suicide is covered after the policy has been in force for at least one year. Check with your individual policy.