Life Insurance Explained
The concept of life insurance (also known as ‘life assurance’ or ‘term assurance’) is often difficult to comprehend. Nobody wants to think about death; in fact many of us are superstitious about planning for after our death, believing it to be a morbid topic and one that might even hasten the inevitable.
But the reality is that our loved ones will need support after we have passed on and knowing you have a comprehensive life assurance programme in place will provide peace of mind for both you and your loved ones.
What is Life Insurance?
Put Simply, Life insurance is a policy provided by an insurance company that pays your family either a lump sum or a series of smaller sums in the event of your death. You select an amount of cover and pay a fixed premium for a fixed number of years. You receive a full payout of the insured amount should you claim at any point whilst the policy is in force.
Policies vary widely; some may guarantee a payout, others expire after a certain period of time. Some have premiums and payouts set in stone, while others offer more flexibility.
Why do you need Life Insurance?
Unsurprisingly, the principle people give for taking out life insurance is to protect their family financially in the event of their death. The following list outlines some of the practical ways that a Life Assurance pay out could help:
- Mortgage repayments – do you wish to arrange for your mortgage to be paid off?
- Replacing the primary earner’s salary – ensuring the family does not fall on hard times after your death.
- Replacing childcare – the death of the primary childcare provider could lead to the need for childcare expenses.
- Education expenses – cover for school/university fees after the death of the primary earner.
Whether it’s about leaving your debts behind or ensuring your family can maintain the standard of living to which they were accustomed, it’s clear there are plenty of reasons to look for the best life insurance policy for your personal circumstances.
