Life insurance is something that everyone hopes they will never need, but it certainly proves invaluable should the worst happen. For anyone who has a joint mortgage (for example with a partner or spouse) life insurance will pay out a specified lump sum or annual payment should you die and will avoid leaving the joint mortgage holder with a large debt they cannot afford.
Life insurance is also useful to have if you have anyone who is financially dependent on you, such as children.If a parent is widowed and left to raise the children alone, they will be faced with the financial pressure of paying bills and childcare fees from one single income. Having the security and peace of mind that they will be looked after when you’re gone, provides added reassurance in the worst of situations.
There are two main forms of life insurance and whichever you choose, it is important to talk to a qualified adviser to ensure your cover is right for you and fulfils the reasons you took the cover out in the first place:
• Level Term Insurance is where the policy holder chooses the size of the end pay-out, which is essentially the sum you are insured and covered for, as well as the duration of the policy, which is known as the term. The agreed sum remains the same throughout the life of the policy and is what will be paid out in the event of a claim being made. This can help with ongoing bills, not just a mortgage
• Decreasing Term Insurance is often solely used to cover the balance of a repayment mortgage. Fundamentally, it is an insurance which is paid over a fixed period of time, but the level of pay-out decreases over the length of the policy, in line with the decreases in a repayment mortgage. Both forms of life insurance have their own benefits and can help to protect your family financially when they need it the most
To seek professional advice and ensure you choose the right cover for you, book an appointment today for an initial consultation.