Life insurance, in its various forms, is used primarily to provide financially for people who depend on you financially, such as spouses, issues, business partners, etc.
Where there is no one who would be financially distressed or disadvantaged by your death, life assurance may not be required; however there are other advantages to having appropriate life insurance in situ, such as:
Mortgage
If the property in which you live is to remain the principle residence of your partner and or children, then it would be normal practice to ensure that the mortgage debt could be repaid in full in the event of death.
Income Protection
Providing an income for financial dependents in the event of death, or critical illness, may assist the surviving spouse and children to maintain their lifestyle and or current and future educational choices.
Business Debts
Businesses are often dependent on a number of key people, and banks and creditors can get worried when key personnel leave a business, whether in the event of death or serious illness. In such cases, credit lines can be shortened or even withdrawn completely, often with fatal consequences for the business. If you are a key person, your business could insure you in order to provide the necessary resources to maintain cash flow, enabling debts to be serviced and replacement personnel to be recruited.
Business Partners & Co-Directors
In the event of death, you would hope that your colleagues will pay a fair price for your share of the business; however this is only possible if the necessary funds are available to the appropriate parties. Life assurance can provide those necessary funds.
The good news is that lots of people already have some form of life assurance, and in some cases, this may be sufficient for their needs. That said, circumstances and requirements change, and subsequently a person’s life insurance requirements may require updating on a regular basis.
Member of a Pension Scheme?
If you are a member of a good company pension scheme, then we would suggest that you read your benefits booklet. You may well find that if you die, your spouse and/or children will receive a cash lump sum and/or a pension. If you provide us with the details of your pension scheme benefits, we can ascertain whether or not your scheme benefits will be sufficient to meet your actual requirements. One potential issue with some old fashioned schemes, given modern lifestyles, is that unmarried partners are not always treated as a spouse.
You may already have some, or sufficient, life assurance to cover your mortgage, however it would be worth checking that your current level of cover is sufficient for your current circumstances.
If you are not a member of a good company pension scheme, or self-employed, or in business, and you have financial dependants, then it is essential that you assess your position, and we can help you to do this.
How much does it cost?
The good news is that life assurance is not necessarily as expensive as you might think. For example, imagine the man with a young family. At the time of writing, there are a number of companies who will provide £100,000 of life cover for a term of ten years at a cost of less than £10.00 per month for a 34-year old male, non-smoker in good health, working in an administrative occupation and not requiring premium protection insurance (waiver of premium).