Ensure the security of your loved ones - At a time of loss, the last thing you want to worry about is financial stability. With life insurance, you can rest assured that your family will receive a tax-free lump sum in the event of your passing. Protect those who matter most to you with peace of mind.
If you need convincing that life insurance is a good product to buy, ask yourself this question. If you were to die, how much money would your family have to live on? Many families would find themselves running short of money very quickly. Your salary would stop, but the household bills and mortgage repayments would still need to be paid.
A payout from a policy could make the difference between your loved ones facing a financial struggle at a challenging and emotional period in their lives, and being able to maintain the sort of lifestyle they enjoyed when you were still around.
Most people tailor their policy to ensure that their financial commitments would be met in the event of their death, so policies are often aligned with the term of a mortgage or other loan.
Life insurance isn’t the only form of protection policy you can take out. Here are some other policy types that families with mortgages often consider.
Income Protection
This type of policy pays a monthly income tax-free if you are unable to work due to an illness or injury. The monthly income under the policy will be between 50 and 70 per cent of your salary and will be paid until you are fit enough to return to work, or reach retirement age.
State benefits often aren’t very generous in this area and only a few employers will continue to support their staff through a long term illness, so income protection policies can help families through difficult financial times.
You can choose the date at which the policy would pay out in the event of a claim. This can range from a month to up to a year. Policies that pay out sooner will have higher premiums.
Critical Illness
Critical illness cover pays out a tax-free lump sum if you are diagnosed with a major illness as specified in the policy, for example cancer and heart disease. Some insurers will make a part payment on an early-stage diagnosis of a condition specified in the policy, the percentage will vary from company to company.
Many people buy a combined life and critical illness policy, and it often makes sense to do so. In this case, a payment would be made on either diagnosis of a critical illness, or death, whichever is the sooner. If the cover is combined in this way, the policy premium is usually cheaper than it would be for separate policies, as there is only ever one lump sum paid out by the insurance company.
