What is life insurance?
Life insurance can pay your dependents money as a lump sum or as regular payments if you die.
It’s designed to provide you with the reassurance that your dependents will be looked after if you’re no longer there to provide.
The amount of money paid out depends on the level of cover you buy.You decide how it is paid out and whether it will cover specific payments, such as mortgage or rent.
You may need to think about whether receiving a payout will affect any means tested benefits your dependents might otherwise be eligible for.
There are two main types of life insurance:
- Term life insurance policies: run for a fixed period of time (known as the ‘term’ of your policy) – such as 5, 10 or 25 years. These kinds of policies only pay out if you die during the policy. There’s no lump sum payable at the end of the policy term.
- A whole-of-life policy: will pay out no matter when you die, as long as you keep up with your premium payments.
Do you need life insurance?
If you have:
- dependants, e.g. school age children
- a partner who relies on your income, or
- a family living in a house with a mortgage that you pay – a life insurance policy can provide for them if you die.
You might also want a policy which covers your funeral expenses.
You can’t rely on the government to take care of your family – the money they would get from the state is much lower than you’d probably expect.
If you want to provide for your family financially if you die, think about getting life insurance.
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Contact Russell Financial Solutions in Rayleigh today to receive our expert guidance and insurance advice.