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Friday 13 March 2015
Friday 13 March 2015
Friday 13 March 2015
Friday 13 March 2015
Life insurance can make the difference between being able to focus on grief and being forced to confront harsh financial realities at a profoundly painful time. While the statistical likelihood of dying increases with age, death can also claim young lives. This means life insurance could be essential for anyone whose death might lead to financial hardship for loved ones. In simple terms, it’s too late to take out life insurance once you’re already gone. With that in mind, here are some key tips for arranging life cover.
Decide What Type of Cover You Need
Life insurance comes in two basic forms: Term Assurance and Whole of Life Insurance.
Term Assurance provides cover for a specific period. If you die within the term of the policy, it pays out. If you outlive the policy, no payout is made.
Whole of Life Insurance, as its name suggests, lasts until you die, provided you meet the agreed conditions. It is guaranteed to pay out eventually.
It’s essential to choose the right form of cover for your personal situation. This may be the right time to consult a professional financial adviser to ensure you make the best decision.
Review Your Level of Cover Regularly
Change is a part of life, and your financial planning should reflect this.
Your first encounter with life insurance may be when purchasing your first home, where cover ensures the mortgage can be repaid if you die.
When children come along, parents need to ensure their family is financially secure in the event of the death of one or both parents.
In such cases, consider policies that increase over time to keep pace with inflation. This helps ensure the level of cover remains relevant to your family’s evolving needs.
Don’t Overlook Home-Makers
It’s easy to focus on the monetary value of employment earnings, but the role of a home-maker also carries significant financial worth.
If the primary home-maker were to pass away, you might need to factor in costs for:
Childcare arrangements
Domestic tasks such as cleaning, cooking, and household management
Recognising the contribution of a home-maker in your life insurance planning ensures the family remains supported.
Make Yourself an Attractive Customer
While you can’t stop time, you can take control of your lifestyle. Life insurance providers favour customers who are likely to live longer or maintain premium payments for many years. Adopting a healthier lifestyle can not only improve your life expectancy but also lower your insurance premiums.
For example:
Smokers can reduce premiums significantly by quitting smoking. Savings can also be added to the money saved on cigarette purchases.
After making positive lifestyle changes, speak to your insurer or shop around for a better deal.
Ensure the Payout Method Is Effective
It would be ironic to carefully arrange life insurance but forget to ensure the payout reaches the right people efficiently.
For parents and partners, a common decision is:
Leaving everything to a partner, trusting them to care for the children
Leaving money directly to children in their own right
The choice depends on your circumstances and preferences. However, writing the policy in trust can be extremely helpful for those left behind.
By doing so, the insurance payout is ring-fenced from probate, meaning the funds can be accessed quickly to meet immediate needs.
Financial Planning: The Role of Life Insurance in Family Security
Properly arranged life insurance ensures that your loved ones can focus on emotional healing rather than financial worries. Whether you’re young, a homeowner, or a parent, life insurance provides peace of mind knowing that those you care about will be financially secure.
Take the time to review your cover, make positive lifestyle changes, and consult a professional if needed. The right policy could make a world of difference during the most challenging of times.
Life insurance can make the difference between being able to focus on grief and being forced to confront harsh financial realities at a profoundly painful time. While the statistical likelihood of dying increases with age, death can also claim young lives. This means life insurance could be essential for anyone whose death might lead to financial hardship for loved ones. In simple terms, it’s too late to take out life insurance once you’re already gone. With that in mind, here are some key tips for arranging life cover.
Decide What Type of Cover You Need
Life insurance comes in two basic forms: Term Assurance and Whole of Life Insurance.
Term Assurance provides cover for a specific period. If you die within the term of the policy, it pays out. If you outlive the policy, no payout is made.
Whole of Life Insurance, as its name suggests, lasts until you die, provided you meet the agreed conditions. It is guaranteed to pay out eventually.
It’s essential to choose the right form of cover for your personal situation. This may be the right time to consult a professional financial adviser to ensure you make the best decision.
Review Your Level of Cover Regularly
Change is a part of life, and your financial planning should reflect this.
Your first encounter with life insurance may be when purchasing your first home, where cover ensures the mortgage can be repaid if you die.
When children come along, parents need to ensure their family is financially secure in the event of the death of one or both parents.
In such cases, consider policies that increase over time to keep pace with inflation. This helps ensure the level of cover remains relevant to your family’s evolving needs.
Don’t Overlook Home-Makers
It’s easy to focus on the monetary value of employment earnings, but the role of a home-maker also carries significant financial worth.
If the primary home-maker were to pass away, you might need to factor in costs for:
Childcare arrangements
Domestic tasks such as cleaning, cooking, and household management
Recognising the contribution of a home-maker in your life insurance planning ensures the family remains supported.
Make Yourself an Attractive Customer
While you can’t stop time, you can take control of your lifestyle. Life insurance providers favour customers who are likely to live longer or maintain premium payments for many years. Adopting a healthier lifestyle can not only improve your life expectancy but also lower your insurance premiums.
For example:
Smokers can reduce premiums significantly by quitting smoking. Savings can also be added to the money saved on cigarette purchases.
After making positive lifestyle changes, speak to your insurer or shop around for a better deal.
Ensure the Payout Method Is Effective
It would be ironic to carefully arrange life insurance but forget to ensure the payout reaches the right people efficiently.
For parents and partners, a common decision is:
Leaving everything to a partner, trusting them to care for the children
Leaving money directly to children in their own right
The choice depends on your circumstances and preferences. However, writing the policy in trust can be extremely helpful for those left behind.
By doing so, the insurance payout is ring-fenced from probate, meaning the funds can be accessed quickly to meet immediate needs.
Financial Planning: The Role of Life Insurance in Family Security
Properly arranged life insurance ensures that your loved ones can focus on emotional healing rather than financial worries. Whether you’re young, a homeowner, or a parent, life insurance provides peace of mind knowing that those you care about will be financially secure.
Take the time to review your cover, make positive lifestyle changes, and consult a professional if needed. The right policy could make a world of difference during the most challenging of times.
