Most of us do not like to contemplate death, but it is something we are all going to face. The impact on family and friends is not just emotional but also financial. The emotional impact of losing a loved one is difficult enough to deal with without worrying about the cost of living. One way of securing your family’s financial future, is to invest in a good life insurance policy which can go a long way to help avoid any added stress at a time of emotional turmoil.
A life insurance policy is a tax-free lump sum of money paid out in the event of your death to your dependants.
How much you pay for a life insurance policy depends on how much cover you want and the type of policy you get. Generally, the younger and healthier you are when you buy life insurance, the cheaper it will be. One important thing to note is that there are different types of life insurance policies which contain very different benefits.
Level term life insurance is designed to pay your beneficiaries a set amount of money as a lump sum if you pass away within a specified period (the term). How much money is paid out and the length of the term is decided by you.
Decreasing term life insurance has one significant difference, the amount of insurance reduces over time, so the pay-out will be less if you pass away towards the end of the policy. It roughly works in the same way as a repayment mortgage decreases so it is sometimes called mortgage protection.
You will usually pay a monthly amount for your life insurance which is called a premium. You must continue to pay your premiums as if you do not your policy will expire and you will not be covered. It is good to review your policies when there are any significant changes such as getting married or having a family.
If anyone relies on you for financial support you need life insurance. A life insurance policy can replace your income to help pay off debts or your mortgage. The lump-sum pay-out your dependants receive could also help towards everyday living costs such as food or bills. A life insurance policy provides your family with a financial cushion for their future.
Deciding on the right life insurance policy can be confusing but our expert advisers are here to help you answer the questions ‘What insurance do I need?’ And ‘How much life insurance do I need?’ Contact us for a free no-obligation quote.
What is life insurance?
How does life insurance work?
What is Level Term Life Insurance?
What is Decreasing Level Term Life Insurance?
How do I pay for my life Insurance
Do you need life insurance?
Which life insurance policy is right for me?
