Death. Everybody knows sooner or later it will happen and yet nobody really wants to talk about it. Thinking about the end of your life will usually entail some concern about how your family is going to cope.
To a degree, you can’t be sure what will happen after your death. But as far as your family’s finances are concerned, there are certain questions you can answer yourself already. For example, do you earn more than your partner? Do you have children and how long will they stay financially dependent on you? Do you have a mortgage?
If you’ve answered yes to these questions, you might want to get some life insurance cover quotes in from websites such as https://www.lifecoverquotes.org.uk/.
What is Life Insurance?
Life insurance is a fairly straightforward type of insurance: you pay into your policy regularly and once you have passed away, your dependents receive either a lump sum or regular payments. This way, they can cover the cost of living without having to make major financial adjustments while they are grieving.
There are two types of life insurance products you could purchase.
• Term life insurance policies: these run for a fixed term, for example 25 years. There will only be a payout if you pass away during the policy term. You do not receive a lump sum at the end of the policy term but this type of cover could be interesting if it runs concurrently with a mortgage, if you know your partner could support themselves once the house is paid off
• Whole-of-life-policies: your dependents receive the payout once you are dead.
Please note that whilst having life insurance sounds great, it isn’t always easy to decide if it is right in your circumstances. If in doubt, please seek financial advice as a life insurance payout might prevent your dependents from receiving certain benefits. Articles like this also help.
Some points to note:
• The clue might be in the name but life insurance usually only covers death. Sadly, it won’t generally help you if you lose your income due to illness or disability. Some policies, however, do provide a terminal benefit. This means that they pay out once a terminal illness has been diagnosed – if this is of interest to you, shop around to make sure it’s included in your policy.
• As always, there are exclusions you need to bear in mind. A common exclusion is if death is the result of alcohol or substance abuse.
• The pricing structure is complex and will be calculated based on your individual circumstances. Insurers factor in age, health and how high you want the cover to be, amongst many other factors.
• One thing that is special about life insurance is that you can have more than one policy. So if you already have a policy and then your employer also offers one as a benefit, you don’t have to worry about this complicating matters. In the event of death, they should both pay out.
• If your employer does offer life insurance, you are only covered while you are employed.
For more information on the basics of life insurance, check out https://www.bankrate.com/finance/insurance/just-the-facts-on-life-insurance-1.aspx.