Life insurance is a type of policy that protects your family financially by providing a tax free lump sum if you were to die. It can help reduce the financial impact your death could have on your family. Life insurance offers peace of mind to those you care about most.
Should i have life insurance?
If you are single with no one adversely impacted financially by your death, then you probably don’t need life insurance. Use our tool, Shouldi to find out.
Should you have a partner or family who rely upon you for financial support, then life insurance could offer the help they need. A life insurance policy can be the financial parachute your family needs to pay off the mortgage, contridute to daily living expenses and household bills.
Life insurance is a key part of your financial planning and should be considered by new couples, young families, homeowners and those with older children.
If your family couldn’t cope without your income, Life Insurance is the solution.
You can use our tool, Shouldi to find out if Life Insurance is something you should consider.
What types of Life Insurance are available?
There are two main types of Life Insurance, Term Life Insurance and Whole of Life Insurance. Term Life Insurance provides cover for a specific period of time. For example, if you have a mortgage you may take out life cover for the duration of that mortgage.
Whole of Life Insurance provides cover for the entireity of your life even paying out a cash lump sum when you pass away.
Term Life insurance comes in different flavours. Level Term, Decreasing Term, Family Income Benefit and Index Linked.
The type you choose very much depends on your situation and the reasons for purchasing the cover.
You may have a Capital Repayment mortgage, where the amount you owe reduces with every payment. In this case you could choose to have a Decreasing Term product. This means the amount you’re covered for reduces as the years go by.
You could have a Level Term product where the amount paid out remains the same. Or you may want to consider a Family Income Benefit product that pays out a monthly allowance. You can even have an Index Linked policy that increases the amount you are insured for to protect you against inflation.
You can use our tool, Shouldi to find out what type of policy is best suited to your situation.
How does Life Insurance work?
Life Insurance pays out a cash lump sum on death or diagnosis of a terminal illness with less than 12 months to live.
You choose the amount of cover you need and for how long. The policy can be arranged on just your life, or on a joint basis with someone else, typically your partner. Premiums are paid either yearly or annually.
