What is life insurance?
Life insurance is peace of mind. It’s a policy that lets you leave some financial security for your loved ones if you pass away. Your family would usually get a lump sum that can help to pay off any debts, like a mortgage. Or if you like, you can arrange to provide a regular income for them instead.
Every family is unique, so you choose how much your policy will pay out. A financial advisor like myself can help you work out how much your partner and children might need, based on their living expenses as well as any outstanding debts.
Can I afford Life insurance?
Monthly premiums differ for everyone, based on:
How much they want the policy to pay-out.
How long they want the policy to last.
If they opt for a decreasing pay-out.
If they choose a level pay-out that doesn’t decrease.
Or decide on an increasing pay-out.
The cost also depends on what their general health is like, someone who has serious or numerous underlying medical conditions, could pay more compared to someone who has a clean bill of health, this is because they are deemed as having a lower age of life expectancy.
The good news is that Life insurance is more affordable than some people think. Allot of people have the preconception that it’s expensive because of the large compensation that could be rewarded to someone’s loved ones in the event of their death. Depending on your age and lifestyle you could get cover starting from as little as £5 per month if you’re aged between 18-29 or £43.46 if you’re 60+, again, it depends on your circumstances and the plan you choose.
To get some tips on budgeting your finances for the things that are important in life, I suggest that you read this article from A MONEY THING HAPPENED
How does life insurance work?
Life insurance policies usually pay out a lump sum, which can be useful if you want to pay off a mortgage or other debt. But, you also have the option of paying out regular amounts over time - this can be handy if you want to leave an income for your loved ones. You make your monthly payments, and when you pass away, the people you’ve nominated (such as your family or other dependants) get the pay-out according to the plan you’ve chosen.
Will my life insurance policy pay out?
It’s sometimes said that life insurance policies won’t pay out, but this just isn’t true – according to the association of British insurers, 98.3% of life insurance claims were paid out in 2019, the highest on record.**
·
Covered
o Death from unexpected illness
o Accidental death
·
Sometimes covered
o Terminal illness
o Suicide
·
Not covered
o Drug or alcohol abuse
o Undisclosed health issues
**According to data provided in an ABI news release in May 2020, accurate as of May 2020
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