What is life insurance?
I’ve been told that I need life insurance but as I don’t have any children do I really need it?
Life insurance is a simple product designed to provide a lump sum or monthly income payment on death. It is designed to provide your dependents with financial security on your death and ensure that they are not left with a shortfall in income. It can also be used to protect mortgage and loans.
Ask yourself:
– Do you have cover at the moment?
– Do you have anyone that depends on you or your income?
– When did you last review your life insurance?
– Are you paying too much for your existing life insurance policies?
– How would your spouse/partner/dependents cope if you were to die tomorrow/next week/ next month? – have you cover in place?
– Have you any loans that are not covered by a life policy?
What are the benefits of life insurance?
It’s true that not everyone needs life insurance, however, if someone would be adversely affected by the loss of your income should you die, then you really should have some cover in place.
What type of life cover do I need?
– Whole of Life Cover: can provide family protection as long as you live and/or your dependents need it. This cover is the most expensive as there is no expiry date.
– Term assurance: Cover for a specified term.
– Convertible Term assurance: some companies give the option of converting the cover beyond the original term without medical evidence.
– Mortgage Protection: life Insurance is necessary for anyone buying a house. It is used to clear your mortgage should you die during its term.
– Company Directors Insurance or Keyman Insurance: will ensure the financial survival of your business in the event of the death of a director or key employee.
– Inheritance Tax Insurance: provides a lump sum on death to pay any inheritance tax due to your estate.
Family Income Benefit: This is a frequently ignored form of life insurance, even though it offers appropriate cover for many people, and is cheaper than traditional forms of term assurance. A family income benefit policy will pay a monthly income to your loved ones, rather than a lump sum. This is a big selling point, as you may not want to leave your loved ones having to make complex investment decisions with the lump sum they would get from other policies upon your death.