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The kind of life insurance you need will depend on your circumstances. Anat Arkin examines the options

Death and taxes may be the only certainties in this world, but when it comes to planning for the future, people often forget that the Grim Reaper could strike sooner rather than later.

According to the Association of British Insurers, a third of adults in the UK have no form of life insurance, and millions more are under-insured. Many of those with life cover have polices that will pay off the mortgage if they die but not leave any money for their children or other dependants.

The insurance industry reckons that, as a rule of thumb, breadwinners need to take out cover worth 10 times their annual income - though the exact amount will always depend on the individual's circumstances.

For a young teacher without children or large debts, life insurance will not be a priority. Someone in that position may have more need for income protection or critical illness cover, says David Brookbank, of Teachers' Mortgage and Investment Services, a Warwickshire-based firm of financial advisers.

A teacher with dependants, on the other hand, would almost always be wise to take out life insurance. But savings, contributions to the teachers' pension scheme and the death-in-service grant payable under the scheme, and now worth two years' salary, can all help to reduce the amount of life cover needed.

"If somebody has been teaching for a number of years and has got a number of years' superannuation, their spouse will get an income in the event of their death," says David Brookbank. "But that's only part of the income they will need, so you have to ask what they need to bolster that by. It might be that they don't need 10 times their salary. They might need only three or four times their salary."

While a teacher can name a cohabiting partner as the beneficiary of a death-in-service grant, only widows, widowers or financially dependent relatives are entitled to a pension under the Teachers' Superannuation Scheme. So teachers with common-law partners may need a higher level of life cover than their legally married colleagues.

Married or not, anyone who wants to avoid leaving a financial mess if they die should take out enough insurance not only to give their dependants a long-term income but also to settle any outstanding debts and pay for the funeral (which with the rapidly rising cost of grave plots can cost up to Pounds 3,000). They should also allow for the effect of inflation on the sum assured and consider whether their life is the only one needing cover.

Fiona Price, managing director of Fiona Price and Partners, which offers tax and financial advice, mostly to women, says that in families where only one parent is in paid work, both parents should be insured.

"If the person who is looking after the children dies, you'd need an income to replace what they do. That is sometimes overlooked," she says, adding that many couples are under-insured because they do not talk about money.

"It's often considered that talking about money is the kiss of death for a relationship. But in fact when you are getting to know someone and finding out all the intimate details about that person, money should come up along with all the other intimate details."

Taking out life insurance early on in a relationship makes sense because the cost of cover increases with age. Direct insurer Zurich Municipal, which offers teachers a 15 per cent discount on its insurance products, gives the example of a 30-year-old, non-smoking female teacher taking out "term insurance", which would pay out Pounds 150,000 if she died within 10 years. Whereas she would pay Pounds 12 a month, the same cover would cost a 40-year-old woman teacher Pounds 19.94 a month.

Monthly premiums for a 30-year-old, male non-smoker taking out a similar policy would be Pounds 14.83; for a 40-year-old they would come to Pounds 25.73.

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