Do I need life insurance?

29th March 2020

Life insurance gives you peace of mind that your loved ones will be covered financially when you die – your next of kin may become responsible for any outstanding debts you may have, your childcare costs or mortgage repayments. Even if you have no debts, own your home outright and have been careful with your finances throughout your life, you may still wish to take out a life insurance policy to leave a legacy for your loved ones and to help cover the cost of your funeral arrangements.

These are some of the key reasons why people buy life insurance:

  • Buying a new home – you’ll be protecting the cost of payments on your home and meeting your financial commitments should the worst happen.
  • Getting married – a policy that pays out if one of you were to pass away will ensure your partner’s financial commitments are covered.
  • Planning a funeral – policies such as over-50s life cover term life cover will pay the cost of a funeral on death.
  • Having a baby – raising a child is expensive and if you’re planning private schooling or university, the costs can be enormous. Taking cover to protect your children’s future expenses will give you peace of mind and reassurance for them.
  • Inheritance tax – If you want to protect the legacy that you’ll leave your loved ones when you die rather than have it all pass to HMRC, you could consider putting your life insurance policy into a trust, which will ensure what you leave behind will be exempt from inheritance tax.

 There are three main types of term life insurance:

  • Level cover offers a fixed cash sum on your death.
  • Decreasing cover pays out a reduced cash sum over time in line with your debts, loans or repayment mortgage – the longer your cover is in place, the less will be paid out.
  • Increasing cover pays out an increased cash sum each year to counter inflation – your cover increases in line with our monthly payments.

If you’d like to know more about life insurance, talk to our team of independent insurance protection advisers who have access to a great range of insurance products and can find you the right plan for your needs. Call us on 08454 500200 or click here to make an enquiry.

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April 2020

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