We ask our clients one simple question: What would you do if your most cherished and irreplaceable possession becomes damaged beyond repair, or worse, lost?
We insure our homes, cars, pets and even our mobile phones, but, extraordinarily, we often neglect to take out cover for ourselves.
There are so many statistics outlining how valuable it is to have life insurance, but at Mortgage Advice Brokerage we find that people have spent many years in ownership of property or employment but without any life insurance to cover them should the worst happen.
While arranging insurance to protect against the financial impact of being unable to work through ill heath, becoming critically ill or even death may not be a pleasant thing to think about; it does make sense to do so.
There are many ways to protect your standard of living, and with a large range of products available there will be an appropriate policy for most circumstances and budgets.
There are several ways in which to protect yourself and your family in the event of an untimely death. Most people take out life insurance to provide for their families and alleviate any financial worries during what will be a very difficult time.
Here is an overview of the different types of insurance available:
Level Term Assurance
Level Term Assurance pays a predetermined lump sum in the event of death during the duration of the policy. Set up for a specific amount at the outset that will remain the same throughout the duration of the policy – hence the name level.
Decreasing Term Assurance
Decreasing Term Assurance is similar to Level Term Assurance, but the benefit gradually decreases over the term of the policy. These policies are designed as cover for a repayment mortgage, or other loans where the amount of capital outstanding also decreases over time. Because the benefit reduces over time, the premiums are kept very low.
Family Income Benefit
Family Income Benefit is the hidden gem of insurance that not many people are aware of. As the name suggests they are most suitable for people who have children.
Instead of paying a lump sum upon death, it will pay a regular monthly tax-free income in the event of death to your dependents up until the end of the term of the policy. We would normally structure it to coincide with your youngest child reaching an age where they should be self-sufficient. Whilst having a mortgage repaid will improve things from a financial perspective, there will still be ongoing costs on a monthly basis with raising a family and running a home. That’s where this type of insurance can be most beneficial.