They say the only two things that are certain in life are death and taxes. Let’s talk about the death part. Death quiet frankly is the ultimate equaliser, we’re all going to experience it one day and the sad part is that we don’t know when!
There are only two things certain in life: death and taxes
I think it’s very important as parents and parents to be that we really consider life insurance options to protect our loved ones. This will be another informative post and I won’t go into too much detail but sufficient enough to convey my message across.
I think it’s very important as parents and parents to be that we really consider life insurance options to protect our loved ones. This will be another informative post and I won’t go into too much detail but sufficient enough to convey my message across.
It’s probable that we have insurances for the following:
- Car/Vehicle
- Content (home)
- Travel
- Pet
It’s probably more important to have life insurance. After all we may never have a car accident, may never have our personal items damaged, may never have issues with our flights but we will certainly die one day! (apologies if It sounds depressing). As a result I do think it’s essential that we take the necessary steps to protect our loved ones in the event that we die!
Below are a few types of life insurances that I suppose one can take out depending on their circumstance:
Death in Service/Life Assurances:
Companies provide a death in service benefit to their employees. This tends to be a lump sum pay-out to whoever you choose should you pass away while in service to your employers.
The money is tax free and is typically a multiple of your salary, the multiple will depend on your employers package. For example if you earn £30,000 and the multiple as per your company package is 4 the payout to your beneficiary would be £30,000 x 4 = £120,000 should you pass away during your time with your employers.
The benefits only last for as long as you are employed by the company. In addition you’ll no longer be entitled to receive it should you stop work or change jobs; unless your new employers offers the benefit of course.
Family income benefit:
This is payments to beneficiaries from date of claim to the end of the policy term. Whereby the total amount paid out by insurers tends to be lower than under term policy, hence monthly income may be insufficient to pay off entire debt, nevertheless this can still be helpful.
Mortgage Protection Insurance:
If you have a mortgage then this type of insurance policy covers the outstanding balance on your mortgage should you pass away before you finish paying it off. The payout for this policy will fall in line with the reduction of debt as time goes on.
Termed Policy
This is probably the most common form of life insurance; this falls into three categories.
Level term: This term covers you for a set sum that remains constant during the term. If you don’t pass away during the term, your policy lapses and you’ll need to take out a new life insurance policy.
Decreasing term: This term is usually taken out to ensure that a specific debt is covered for example a mortgage. If you are paying off your mortgage and you were to pass away your dependants would need less money to cover what remains of it as time goes on. This policy ensures that if you die, your dependants are covered for the outstanding debt.
Increasing term: Inflation is something to consider as cost of living rises. The aim of this payout is to keep pace with the cost of living.
Whole Life Policy
Unlike the termed policy, the whole life policy cover you for your whole life; guaranteeing a payout to your loved ones. Due to the certainty of the payout this policy tends to be more expensive in comparison to the termed policy.
Other Things To Consider
Existing Medical Conditions
Very essential that you declare any medical conditions at the time of taking out life insurance. If not then the policy will almost inevitably be invalidated when your dependants make a claim.
Final Thoughts
I hope this was helpful in some way. I think it’s important that we as parents really consider taking out a form of life insurance for the protection of our loved ones.
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