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