Although it may be difficult and unpleasant to think about death, we all need to consider how your loved ones would cope financially if and when we die. That’s why now is as good a time as any to benefit from life insurance advice.
All households have bills to pay and many have debts, and the largest of these is usually the mortgage on the family home. If keeping up with paying the bills is dependent on your earnings then it makes sense to take out life insurance that will pay your dependants a lump sum or an income if you die.
Dependants include your family or anyone else who will be financially affected by your death.
How much does life insurance pay out?
The amount paid out by life insurance is dependent on the sum insured. Obviously, the more this sum is, the higher the premiums will be. It is important that the sum insured will cover the household bills.
You could buy an insurance policy that will pay off the mortgage so at least you know that the family home is safe after you have gone.
An insurance policy usually pays a lump sum, though you can take out one that provides a regular income instead.
Also, a policy can have fixed lump sum or the sum could decrease over time. This type of policy can be used to cover the mortgage where the outstanding amount owed reduces each year.
The policy term
Life insurance can be full term, which means that it lasts until you die, or you can choose a shorter term in order to reduce premium costs. If you live beyond a specified period, the insurance is cancelled and no money will be paid out. Many people fix the term to last until their mortgage is paid off. You could also fix the term to finish after your children are grown up and able to earn their own income.
The cost of life insurance
A basic life insurance policy can be as little as £5 a month, but premium costs vary widely. The cost is affected by your age, your current health and your occupation. Some occupations are regarded as high risk and people working in these industries will pay more for life insurance. MoneySuperMarket found that life insurance for smoker’s costs on average £18 more a month.
Critical illness cover can be added to a life insurance policy for an extra monthly fee. This insurance will pay out a lump sum if you are diagnosed with a serious illness. The policy will define which illnesses are covered and which are excluded.
Buying life insurance
There are a number of choices that need to be made when deciding on the best insurance policy for your needs. Finding the best policy is not easy, but professional life insurance advice is at hand. A broker can make your options clear and help you decide on the best policy to protect your dependants.
Ascot Mortgages specialises in matching your personal circumstances to the right life insurance deal at a competitive price that you can afford. Talk to Ascot Mortgages today for life insurance advice that can help financially protect your family.