Life Insurance

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Article created by Christian Duncan, Director – Mortgage and Protection Adviser
Last updated 11th August 2023

Life Insurance is an integral part of financial planning that offers security and peace of mind.

Whether you’re relatively new to the world of life insurance or have a policy in place at the moment and simply looking to refresh your knowledge, this comprehensive guide is designed to address your queries and help understand the essential elements of life insurance and why it is so important.

What exactly is Life Insurance?

An indispensable safety net, life insurance is a contract between you and your insurer. It guarantees your beneficiaries a payment, known as a death benefit, if you pass away within the policy’s term. This insurance aims to provide financial stability to your loved ones and cater to their monetary needs should you pass away during the policy term.

So, how does life insurance work, and what is its main purpose? Simply put, it’s a lump sum of money. Usually to replace lost income, settle debts, or cover funeral costs, helping your family maintain their standard of living even in your absence. Its most common use is to clear mortgage debt. By doing this it will ensure the family can remain in that property without suffering any financial strain.

Why Is Life Insurance Necessary?

Now that we have life insurance explained simply, it’s crucial to understand why we need it. Mainly, life insurance acts as a financial cushion for your family when they’ve lost their source of income. Without it, your dependants might struggle to cover everyday expenses or unexpected liabilities, such as mortgage payments or debts.

Types of Life Insurance Policies

There are different types of life insurance based on the coverage you require. Two key types are term life insurance, which covers a specified set of years, and whole life insurance, a permanent policy that covers your entire lifespan.

Who Needs Life Insurance?

While everyone might not require life insurance, it’s particularly important for breadwinners with dependents or individuals with significant debts. Even those without dependents might opt for a life insurance plan to cover funeral costs or leave a legacy behind for a loved one or a charity.

How to Choose the Right Life Insurance

When choosing life insurance, consider your personal circumstances, financial goals, and family needs. Do you need coverage for a specific period, or do you want lifelong coverage with a cash value component? Understanding these factors will help you make an informed decision. Explaining your financial circumstances and future plans to us will enable us to make a recommendation to you.

The Cost of Life Insurance Calculator

Its important that any life policy that is put in place (on risk) is affordable and inline with your needs. Having a policy that causes you financial could result in you having to cancel the policy through desperation to save money. This would leave you and your family unprotected.

When You No Longer Need Life Insurance

As time passes, your financial commitments may reduce, which can lessen your need for life insurance. But, remember to assess your specific situation before discontinuing your policy. Once you’ve cancelled a policy it isn’t possible to pick up where you left off. A free no obligation conversation with one of our qualified advisers will help you establish if the need for insurance is still present.

Life Insurance in Perspective

In conclusion, life insurance isn’t merely an expense; it’s an investment in security and peace of mind. Remember, the best time to get life insurance is now – insurance costs increase with age and health issues. So, don’t delay in safeguarding your family’s future.

Life insurance is indeed a wise purchase for most individuals. It brings financial security, ensuring your loved ones can carry on without financial worries during tough times. It’s not something people like to think about, but it’s an essential step in protecting your family’s financial future. If you would like to book a call with us to discuss a new or existing policy then please click here.