Many people will insure their homes, cars or even mobile phones but what about providing financial security to those who mean the most? The current pandemic crisis has no doubt highlighted the importance of having a protection plan in place for you and your family.
What is Life Insurance?
Life Insurance is designed to provide financial support to loved ones if the unexpected happens. The death of a partner or a parent has an emotional impact, but it can also lead to financial hardship too. Most Insurance policies offer to pay out a cash sum to your loved ones to help them deal with the everyday money worries such as household bills or childcare costs.
Recent figures show that in 2019 more than £5.7bn was paid out in protection claims, accounting for all claims made. Therefore, this accounts for £15.8m paid out each and every day.
New life assurance for NHS and social care workers
The UK Government has announced a new scheme which promised £60,000 to be payable to the families of NHS and social care workers who have lost their lives to COVID-19 while working on the frontline.
What types of life insurance are there in the market?
There are two main types of life insurance:
- Term life insurance policies- run for the ‘term’ of your policy e.g 5,10 or 15 years and will only payout if you die during the policy. There is no lump sum payable at the end of this policy term.
- A whole-of-life policy- will pay out a lump sum no matter when you die, as long as you keep up with the premium payments.
Is critical illness covered in Insurance policies?
Life Insurance usually only covers the event of death. However, there are some life insurance policies that provide a terminal illness benefit, although these are not automatically granted.
Do you need Life Insurance?
If you have:
- Dependants e.g school-age children
- A partner who relies on your income
- A family living in a home with a mortgage that you pay – an insurance policy can take these financial pressures off your family in the event that you die.
Life cover can also be useful to cover your funeral expenses, but if you're looking specifically for funeral planning a specific funeral plan might be better suited.
To arrange life cover for you and your family speak to your adviser today, or contact us here.