What is Life Insurance?
Life Insurance is an insurance policy to pay benefits to policyholders beneficiaries encase of death.
It ensures your Partner or Family get a lump sum payout on your death. This will assist with paying off mortgages, debts and also gives your loved ones or family the financial support to carry on.
Do you need it?
According to certain resources, around 500,000 people die per year in the UK, rising to around 590,000 in the next 20 years.
If you have a family or you pay bills you should consider life insurance. If you don’t have dependents and are single then you would be right to ask the question. If you don’t have a partner or dependents you still need to consider other people around you who may have to take on any debt of yours or who may be liable financially if you die.
When taking out a mortgage you will normally need to have life insurance in place beforehand.
How Long do I need to be covered for?
That is completely up to you. A rough guide to assist would be until your dependents come of age where they can financially provide for themselves or your partner and yourself reach retirement age. The terms are flexible between 1 and 30+ Years.
What is the right cover for me?
There are two types of life insurance policies.
- Level Term: The payout stays the same all the way through the duration of the policy term. For example, if you choose £400,000 then this will be the payout whether you pass in 1 year or 30 years.
- Decreasing Term: The amount covered reduces over the duration of the term as debts and mortgage payments get lower.
The best indication is to take roughly 10 times the highest earners’ income. However, you might want to over-insure yourself for certain things.
- Think about what your dependants might need in the future, University or future financial burdens.
- Any Debt that may be outstanding if you died. This could include things like Car Loans, or a mortgage.
- Funeral Costs or other expenses your death may cause.
You may also like to think about putting the policy into something called ‘a trust‘. This would avoid the 40% Inheritance tax your beneficiaries would have to pay potentially. Our policies offer this option.
Life Insurance For Home Owners
When purchasing a new property it is normally a requirement to also obtain Life Insurance. Mortgage Life Insurance is also known as Mortgage Protection will pay out if you die before you finish paying off your mortgage. This will ensure that your family are covered from having to continue paying the monthly instalments. It is a great way to protect the future of your family and dependants.
Do I Need Life Insurance If I Don’t Have Dependants?
This is a very common question asked by home owners. To give a simple answer to the question is no, Life Insurance Or Life Assurance is there to cover the monthly costs of your Mortgage to protect your dependants. If you do not have any dependants then after death you have no financial burden to pass onto anyone.
If you do have dependants it is recommended that you take out Life Insurance. Most Lenders will require this so it’s important to check this information with them.
Other Life Insurance Tips and Tricks
- Choose trustworthy companies
We help compare a wide assortment of trusted life insurance providers*.
- You can choose to pay monthly or annually
Select annual premiums if you want a cheaper insurance quote. The discount percentage can vary per life insurance provider which you can discuss with your insurance broker.
- You can decide on the Cover Amount and Cover Length
These premium differentiating (cost) factors are taken into account when getting set with a life insurance quote.
- Some life insurance companies offer incentives to join!
You could receive a gift card when you sign up to a life insurance plan from a particular company (please check with the insurance broker if any policies come with this).
- Try Compare Life Insurance Quotes
Some contact details will be required so we can ensure an insurance broker can get back in touch with you to start the insurance quote process.
*The first month completely free – as part of a special offer by Ross & Richardson Limited, they are offering the first month free of charge when taking a policy out through them. This will apply between the ages of 25-50 years of age. This offer is set to expire by 01/12/2021. Anyone over the age of 50 cannot apply for the 1 month free.