24Sep2019

Three good points about life insurance

Whatever the future holds in store, having life insurance is a sure-fire way to protect your loved ones.  Consider life insurance as a risk management strategy to protect those dependent upon you financially.

Every day of our lives is a celebration, and everyone needs to appreciate life and live it to the fullest. Our memories are something to treasure, especially those shared with loved ones, those who enrich our lives and make it worth living.

It is crucial to protect not only our memories, keeping them alive with photographs and stories, but also those that make our lives unique. Staying safe and looking after our health is paramount, as is looking after our loved ones. These are just some of the necessary actions we can take. Health and wellbeing ensure we live long prosperous lives, enjoying each moment and making the most of each day.

Of course there are yet unseen emergencies, completely out of our control.  Life insurance is merely a component to have in place, making sure loved ones and dependants are cared for if the unforeseen ever did occur.

For many people with young families, life insurance is a foregone conclusion, while others do not consider it of great importance. How do you know if you need to apply for life insurance/

We have put together three crucial points to chew over.  Pointers to ruminate and decide whether life insurance is relevant to you and, if so, what type of cover suits.  These are the circumstances you ought to be thinking about when deciding if you want to take it further.

Point 1: There are too many different types of life insurance policies

Many people are anxious about life insurance that it is expensive, or it might not pay out in the worst-case scenario. However, a little research, reading up and gaining a reasonable understanding of the differing types of life insurance can help with that all-important decision-making process. In reality, the number of different policies is low and a good advisor will talk you through the most common types and advise which one would suit your personal circumstances.

Here is a quick synopsis of the most common types of policies:

Term Life Assurance provides a basic life insurance policy with minimum input from the policyholder.  Choose how much and for how long you require cover.  Doing the maths is important, ensure sufficient life insurance policy to cover and protect considerable loans, e.g. mortgages, car loans, university fees etc.  When you receive a quote you are happy with and wish to proceed, simply pay each month for your policy.  If you pass away during the term, the policy will payout to your loved ones.

There are some flexible options available such as:

  • Level term – refers to the sum insured, i.e. it remains level throughout the policy
  • Decreasing term – relates to the premiums decreasing over a specific period.  Generally reducing in line with mortgage repayments.  In this case, protecting for the remaining mortgage term if you pass away.  In this example, when the mortgage clears the policy comes to a natural end.
  • Increasing term – the sum insured increases in line with inflation.

Different policies attract different premiums, and it is essential to speak with an advisor to ensure you get the right policy at the right price.

Point 2:  Is it worth having life insurance? Am I too young to even think about life insurance?

It is easy to dismiss life insurance when you are in your 20 or 30s, without realising the arbitrary reality of nature, life’s difficulties, and the prevalence of serious illnesses.

When momentous life events take place such as getting married, buying a house, having children, these milestones should trigger the realisation of the importance of life insurance. Life insurance protects your loved ones in the unfortunate circumstances of ill health or death related diseases.

The benefits of life insurance far outweigh the price of a policy, especially taking out a policy in your 20s or 30s. Apart from the financial benefits to your loved ones facing monthly bills in the event of the loss of a source of income from a significant breadwinner, with very little or no life savings, taking out cover at a young age will save thousands on premiums in the long term.

Protecting loved ones from financial hardship in the event of your passing away need not cost a vast amount, whereas the price of peace of mind is priceless.

Point 3:  Can I trust the insurance company to payout in the event of a claim?

There is a misconception surrounding insurance companies denying claims.   Remember that insurance companies in the UK come under strict scrutiny from regulators and the press. A claim denied would only occur in certain instances, hence the importance of obtaining good advice when completing the application form.

Common reasons for invalidation include:

  • The policy expired
  • Unpaid premiums
  • Reasons for the cause of death (e.g. suicide, drug overdose, extreme sporting accident)
  • Falsification or misrepresentation (all life insurance policies will have a clause to cover this point, for example ticking the non-smoking box but then diagnosed as lung cancer due to smoking)

Other factors that may delay a claim requiring investigation include:

  • Beneficiary disputes
  • Homicide or death occurring soon after the issue of policy

You will want to safeguard a smooth and prompt payout to your loved ones in the event of your passing away.  Hence it is crucial to provide as much information as required, leaving nothing to chance and providing an accurate representation of health and hobbies. Include mental health issues and all family medical history.  Speaking to one of our advisors will ensure no mistakes or misrepresentations and a straightforward process in the event of a claim.

On a positive note, recent statistics confirm a 98% successful payout from life insurance companies in the UK, a testament to the great work provided by committed advisors.  It is essential to take on board all the elements of a life insurance policy application.  Rather than treating this significant financial advantage as a “one-click” solution, take time out to talk through every aspect, thereby obtaining correct cover right from the start.

Our team are on hand to answer any question about life insurance.  Plus other types of protection you might be interested in, for example, critical illness, mortgage and income protection, all the essential financial elements required to protect yourself and your family.

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23Aug2019

Life insurance for newlyweds

Just married?

Congratulations to all the newlyweds out there. When the honeymoon is over, and reality kicks in, protecting each other both with emotional and financial support is tantamount.  After all, this is what partnership is all about and the vows taken by you as a couple reflect this.  Now is the time to consider a unique wedding gift to each other!

When young couples set out as a married couple, they may wish to buy a house and have children.  Planning is exciting, and the last thing on their minds is dying.  However, having an awareness of the possibility of one partner dying is crucial. According to the Child Bereavement UK organisation, “a parent of children under 18 dies every 22 minutes in the UK; around 23,600 a year. This equates to around 111 children being bereaved of a parent every day”.

These are extremely sad and shocking statistics, but you have the ability to protect your loved ones should the worst-case scenario happen.

Receiving advice and help to understand the range of options available should be at the top of the wedding list and sorting out this aspect of newlywed finances need not break the bank if the newlyweds are young and healthy. Young couples are low risk, and therefore, the monthly premiums and range of companies in this a competitive market offer low cost policies. You could see your monthly premiums from as little as £10 per month.

Insurance companies use risk to calculate premiums for life insurance is based on risk, with the following factors being essential elements:

  • Age
  • Smoker/non-smoker
  • Type of life insurance policy required
  • Length of term
  • Sum covered

Other issues affect premiums, such as:

  • Pre-existing health issues
  • Hazardous occupations
  • Professional sport players
  • Extreme or dangerous hobbies

The higher the risk, the more expensive the premium!  If you’ve ever been refused or declined a life insurance policy, contact our team of dedicated professional advisors to discuss various solutions and options.

Do newlyweds need life insurance?

As a newly married couple, you will need to consider each other’s circumstances and plan accordingly. Ask yourselves the question: “If I were to die, what impact will my death have on my loved ones”? On the other hand, “financially would my wife/husband/partner/children suffer in any way if I were to pass away”?

How would they cope with the following?

  • Monthly mortgage repayments
  • Other monthly repayments such as debts or car finances
  • Everyday household bills and shopping
  • Childcare
  • Savings for the children’s future such as university etc.

If you were no longer around, your other half would carry the burden of these costs alone, how would they manage financially? Would they suffer?

Funeral costs are rising

According to recent figures, an average funeral might cost more than you think. Shockingly the cost of dying might even set you back a cool £8,000. (Source: SunLife Cost of Dying Report, 2017). Of course, there are cheaper options, but would your family manage to find the funds if you were to suffer an unexpected early death? This financial burden is avoidable and affordable, simply by including this aspect of cover within your life insurance policy.

Newlyweds with a mortgage should take out life insurance

It makes sense that a joint mortgage will be difficult to pay if one partner were to pass away. Imagine your loved one struggling to meet the monthly payments, falling into debt and possibly repossession. Taking out a life insurance policy mitigates this financial burden, acting in a gallant way to ensure the surviving partner will continue to live in the family home comfortably, without the added strain of worrying about the monthly mortgage repayments.

Raising children and childcare costs

According to recent studies, the overall cost of raising a child from birth to the age of 21 is approximately £227,226 (Source: CEBR report – Cost of Raising a Child).

Childcare costs for any family, let alone one-parent families, have escalated in recent years, according to one article by the Financial Times, childcare in some regions of the UK is a staggering £9,100 per year.

It is, therefore, essential that parents consider this when planning a family.  Life insurance will cover such costs of raising a child if one parent were to pass away.

Life insurance will provide the peace of mind, especially for the primary breadwinner, knowing that loved ones will cope financially.  In addition, for a stay at home parent, life insurance is vital to have in place.  Life insurance paid out to the primary breadwinner will cover future costs of childcare, or ease the financial burden of monthly bills enabling that parent to spend time with the children and provide significant financial and emotional support.

How much life insurance do newlyweds need?

Grab a pen, paper, and calculator to work out the amount of cover required.  Make a list to take into account the following:

  • Total mortgage balance remaining
  • All debts and car costs
  • The number of years of lost income (10 is a good starting point)
  • Childcare costs if the surviving parent remains working
  • Ages of children or other dependents
  • Household living expenses including bills and shopping
  • Regular payments to savings

Talk these figures through with each other.  Ensure that you both agree.  Consider the rising costs of living and think about future-proofing your children’s education needs.

What is the best life insurance policy for married couples?

For many newly married couples, the best life insurance policy is often the most affordable one available. There are several options to choose from, but perhaps the most popular (due to its cost-effectiveness) is a decreasing term life insurance policy. A cheaper choice of life insurance due to it taking into account the decreasing payout in line with the mortgage balance. Whatever happens, the policy will cover any mortgage balance, plus any debts requiring cover under this type of policy.

Another option is level term life insurance where thecover remains fixed, regardless of when you pass away. For example, a life insurance policy with a payout of £250,000 to cover a mortgage will pay out £250,000 even in the event of a paid off in full mortgage within the term of the policy.

If children are a substantial part of future plans, then family income benefit is a advantageous policy to consider.  Essentially this policy replaces a lost income for a fixed term. Family income benefit provides loved ones with a regular monthly payment up to £5000, easily sufficient to cover mortgage and household regular payments. The beauty of family income benefit is that it is a tax-free monthly payment.

What about life insurance for couples getting married in their 50s?

Healthy couples who marry later in life have some life insurance choices. One to consider is whole of life insurance that will last for a lifetime and provides a guaranteed payout when you pass away. The option of the whole of life insurance does involve some health checks and more expensive premiums. Equally important is to ensure the correct level of cover; too much cover is a waste of money, too little will leave the insured wishing they had bought more. Our trained advisors will help you to calculate and determine how much cover exactly you require.

For non-smokers, a cheap life insurance option for newly married couples is the over 50s life insurance policy. Popular due to its eliminated requirement of health checks and affordable premiums. However, the cover provides less cover,  but still a  preferred option for many over 50s due to its ability to cover expensive funeral costs or to leave an inheritance for loved ones.

Newlyweds looking for cost-effective methods of life insurance will find that most insurance policies allow for joint life insurance — certainly a cheaper option but with some caveats to bear in mind. A joint policy is actually one policy split between two people, and when one partner dies, the policy expires after payout. The surviving partner will need to take out a new policy if the cover is required to continue.

What about critical illness cover for newlyweds?

Critical illness cover can form part of your life insurance policy, or provided separately as stand-alone cover. It is possible (and essential) to check the essential illness definitions as found in the list of illnesses covered by the insurer.  Cover can help pay your mortgage, rent or debts, also with private medical treatment, home alterations.

Another consideration is terminal illness cover, often this comes as standard with most life insurance policies and will provide an early payout in the sad event that you are diagnosed with an illness dramatically shortening your life.

In conclusion

Calling all newlyweds! It is crucial to realise the benefits of life insurance. It need not be expensive, especially for young, healthy couples and premiums fixed, saving money over the long term.

Speaking to our dedicated team of advisors will help you to tailor your cover to match your budget. For as little as £10 per month, your partner will not have the extra burden of money worries in this challenging time dealing with the loss of a loved one.

Click on the button below to compare the best life insurance quotes available:

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21Aug2019

Reasons to consider life insurance

There are several factors to take into account when considering taking out a life insurance policy, and most factors will depend on the individual’s circumstances.

If the individual is a single person, with no dependents, then the thought of life insurance will not be a primary consideration.

However, an individual with one or more persons close to him or her, who rely financially upon the individual, life insurance will be a beneficial safeguard and option to think about having.

There is only one question to ask yourself about having life insurance:

“Would my loved ones cope financially without my salary?”

If the answer is no, it is very likely that life insurance is a critical thing to have.

Another common question people ask when talking about life insurance is:

Why do I need life insurance?

While you are around and able to provide essential financial stability for your loved ones, life is good. However,  if the worst were to happen, and you were no longer around your loved ones lose this security.

Everyday essentials to maintain their current lifestyle will be lost, and the following things may be difficult for them to sustain:

  • Mortgage repayments
  • Everyday family living costs such as bills and existing debts
  • Childcare costs
  • Your funeral costs
  • Savings for future child university fees

It makes sense, therefore to consider a life insurance policy that will pay out to cover all the above, from as little as £10 per month.

What about if I am single? Do I still need life insurance?

You might think that life insurance is not a factor to consider if you are single. It may be prudent to review the costs of your funeral, even when you are a single person. Funeral costs are alarmingly high now, more than people realise, and rising every year. Expect someone to pay between £3000 and £5000, (Source: SunLife Cost of Dying report 2017).

That someone may be family members such as your parents or siblings. You may consider this cost to be a financial burden, especially if they will find it hard to source the necessary funds to cover your funeral.  This fact is even more pertinent in the event of an unexpected death.

A life insurance policy may be of benefit for you even if it only has the funeral costs element to it.

Another aspect to consider is that of youth.  Even if you are single, you may have a plan to one day meet someone and start a family. The younger you are taking out a life insurance policy, the better it will be as premiums are low for young people.

Future-proofing your future with a life insurance policy will benefit loved ones of the future and cost you less in the long term.

Do I still need life insurance even if I don’t have children?

If you live alone and enjoy a carefree lifestyle that involves no other person, generally you would not require full life insurance.  Perhaps other than that to cover funeral expenses as previously mentioned.

When thinking about life insurance, the term dependant is one frequently used. However, a dependant is not always about children; it can refer to wife, husband, partner or any family member — basically, anyone who depends and relies upon your salary or income.  Even if your partner etc. is working themselves, your income may make up the difference required to meet all the financial obligations of the household. Therefore, the term “dependant” depicts that someone for whom you love and care.  A dependant is someone whom you would want to ensure can continue to live the lifestyle you help to support financially.

What type of life insurance will I need?

There are different features of life insurance, and depends mainly on what you require, here are some simple explanations:

Whole-of-life cover

A whole-of-life policy is a guarantee of a payout and lasts for your lifetime. The drawback of this policy is that it is more expensive due to its nature.

Term insurance

Also referred to as term life insurance, with a payout within a specific period.  This type of policy is popular as monthly premiums are usually cheaper and can be tailored for a fixed period such as the duration of a mortgage, or for when children are in university.

Decreasing-term insurance

Also called mortgage life insurance due to the nature of payout decreasing each year in line with the mortgage. By the time the mortgage term is complete, there will be no payout. Again, a prevalent option for many as the premiums are much cheaper.

Increasing-term insurance

As the name suggests, increasing term insurance is a policy where the sum assured increases every year by a fixed amount.  Typically designed to keep inflation in mind, especially for very long-term plans. For example, a payout that seems high in today’s market may diminish due to inflation over the term of the policy.

An increasing-term life insurance policy provides peace of mind, especially for those with sizeable assets, and risk of costly inheritance tax. Increasing-term life insurance may help to cover these types of costs.

Renewable term insurance

As the name suggests, renewable term life insurance has the benefit of renewing and extending cover when the policy expires. The advantage being recent health issues will not feature as part of the renewal process hence no requirements for a medical.  However, premiums may be higher due to increased age.

Joint life insurance

Joint life insurance is one policy for two people and offers cheaper monthly premiums. It is essential to bear in mind that when one person dies, the policy terminates ultimately.  It will be necessary for the surviving person to take out a new policy if there are more dependants to take into future consideration.

Another life insurance policy to consider is:

Over 50 life insurance

Over 50s life insurance is a popular option for people in their 50s to consider. Although the payout is generally lower, the sum is considerable and financial help towards funeral costs or a lovely gift to leave for loved ones.

Do I still need life insurance even if I don’t have a mortgage?

A mortgage is often considered one of the main reasons for taking out life insurance.  However, there may be other good reasons to consider life insurance, especially if you have loved ones. For example, your loved ones may use the funds to

  • Help to cover your funeral costs
  • Clear any debts you may have
  • Deliver an inheritance
  • Contribute towards a family event such as a wedding or a holiday
  • Contribute towards a much-loved charity

Conclusion

If the worst-case scenario were to happen to you, the financial impact on your loved ones would undoubtedly be challenging. With so many life insurance options on offer, providing financial protection and a guarantee of financial peace of mind, it is crucial to focus on guaranteeing their security.

Compare life insurance quotes and secure the best coverage for you

At Life Insurance Cover, we carry out extensive comparisons for you to ensure you get the best quote and cover for your circumstances.

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