ABSTRACT
Insurance protection for loss of income in the event of illness or death is the foundation of financial security because most of assets in the early years of one's working life lie in human capital rather than financial assets. The average value of human capital in the UK is higher than the value of financial capital. While old age reduces the value of human capital, death leads to its complete destruction. The amount of life insurance needed depends on the amount of borrowing outstanding and the living costs of the survivors, both of which can vary depending on where they live. For higher earners, the payment of death in service could have tax implications. Death can shake the lives of the survivors, both emotionally and financially. The absence of financial pressures and money worries might enable them to cope better in times of grief.
