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Life Insurance
Life insurance is a policy that will payout money, if a person dies during the term of the policy. It most commonly covers the value of a mortgage, so if one partner dies, the payout goes to the remaining partner to settle the balance on the house.
A life insurance lump sum can also be set up for any amount of money and can then be used to cover lost income, rent, household bills, and debt etc. for many years into the future. Allowing you to grieve and not miss your partner's income, preventing you suffering financially too. Ideally you will have your life insurance paid to each other, if one of you dies, or to another close relative depending on your own situation. For example, an older child (over 18) or designated future guardian.
When should you take out Life Insurance?
ASAP! No, honestly, as soon as you can and when you can afford it. When you start renting or get a mortgage on your home, are the most common times to take out life insurance.
Other important life events that we would recommend you consider taking out a life insurance policy are; Getting married, moving in permanently with your partner, expecting or recently had a baby.
For some people, it can take a life event to happen, close to you, to trigger a thought, to look into life insurance. Maybe a relative or friend has been diagnosed or passed away from cancer, for example. Or some friends have got married and mentioned it in conversation.
Do you need Life Insurance?
Life insurance isn’t a necessary insurance like car insurance is, if you own a car. And it isn’t even required any longer, to take out a mortgage, like it once used to be.
However, we would advise that you need life insurance if you have a partner, children, a mortgage or other financial agreements.
We hope you will never need to use it, but if the worst should happen to you or your partner, you will have the reassurance that you have cover. A payout resulting from a life insurance claim, will help your close relatives or dependants have the security of having the mortgage or debts paid off, and possibly still have money left over for their future.
If your husband or wife (or life partner) was to pass away, all the financial commitments you made together, would then fall solely to you. Grieving is hard enough without having to worry about paying bills and wondering where the money is going to come from to pay off the mortgage or other loans and bills etc.
You don’t just lose your partner, you lose their income into the family. Two salaries now become one and life will probably be quite a bit harder to manage if you have children. A life insurance payout can also cover money needed for increased childcare, hired help or time off work for yourself to do housework etc, a respite holiday, or to put aside for the kids education and future plans.
Having a life insurance policy in place will give them the opportunity to continue living the standard of life you’d like for them.
Quick Summary:
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Your monthly premiums depend on the policy type, your age, health and lifestyle
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You can choose the best sum assured and term to match your affordability
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By having insurance it can help prevent any financial burden
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A lump sum is paid out if you pass away
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Money can be used to pay off your mortgage, replace your income, pay for childcare or education costs and maintain your families standard of living
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You can choose who the policy pays directly to after you have passed away
Why do we recommend Level term life insurance, instead of Decreasing term life insurance?
Someone asked me to “dumb down” insurance and show them the difference between a decreasing mortgage policy V’s a level term for insurance plan:
❤️ Decreasing policy - also known as mortgage protection so basically this policy starts off at the mortgage amount you borrowed then each year this reduces to hopefully run alongside your mortgage until there is nothing left to pay. Your premiums each month will always stay the same and never decrease like your cover amount.
🩷 Level term insurance- this policy starts off at one lump sum of money but this stays the same it never reduces so say if something happened and you are a loved one passed away in a year 10 you are still going to receive that same lump sum money as it hasn’t reduced over time.
The difference between these policies is the premiums but and cover over the length of the policy, but just get the options for both so you can see what may benefit your family more in the future in the event of a claim
I always like to give my clients different options and then have discussions to suit their needs and affordability
It’s so important to know what is out there in regards to insurances and understanding the different terminologist
I’m here to help with any questions and provide you with various quotations to suit your needs and affordability but most importantly answer any questions that you’ve got and give you time to think
There is never a silly question we cover my bubble so please message any time as I’m here to help if needed