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Life Insurance - What you need to know
When an adult in the family dies, it obviously leads to huge emotional hardship for their partner and surviving children. However, there’s no reason why that hardship needs to be compounded as a result of financial problems. That’s often the case and it’s why life insurance is something that families should always consider putting in place. Find out what you need to know below.
What is Life Insurance?
Life insurance covers the costs that your family will face if you were to pass away. It can replace your income for a period of time, cover funeral costs, outstanding debts and mortgage repayments. Each policy is unique and will have its own terms and conditions, so it’s important to pay attention to the details when choosing the policy for you.
The Different Types of Life Insurance Available
There are a few different types that you need to know about. The first is level term life insurance, and this is a type of insurance that covers you for a fixed amount of time and pays out if you die.
Similarly, mortgage decreasing life insurance covers you for a fixed term but only covers your mortgage payments and the payout decreases as the mortgage repayment sum does.
Whole of life insurance covers you for as long as you have the policy and isn’t tied to a fixed term. It also covers more, such as the inheritance tax bill your family might face upon your death.
Do I Need Life Insurance?
Every individual must make their own decision when it comes to deciding whether or not they need life insurance. Nevertheless, if protecting your family in the event of your passing is something you care about, it makes sense to put life insurance in place. It removes some of the worry you might otherwise experience, as well as giving you security and peace of mind.
How Much Does It Cost?
There are lots of different things that’ll impact the cost of the life insurance you buy. First of all, you need to disclose all of your medical conditions and past conditions because hiding these things could void the policy. If you have pre-existing medical conditions, the policy will be more expensive, but also potentially more beneficial. Being a smoker will also increase the cost of your life insurance policy.
What Do You Need to Think About Before Taking Out Life Insurance?
There are advisors and brokers who can help you with finding the right life insurance policy, so using those services is something to consider. When deciding whether you need a policy, think about your dependents and your finances. If you feel your family would need financial support in the event of your passing, putting a life insurance policy in place would be wise.
Many people don’t like to think about the necessity of life insurance until they’re in a position where it can no longer be avoided. Don’t let it come to that though. By putting the right policy for you and your family in place today, you’ll gain peace of mind and won’t have to worry any longer.