It may be one of those jobs you’ve had your on to-do list for a while, but don’t delay making sure your dependants are provided for should anything happen to you, it must be a financial planning priority. Here is our IFA’s life insurance advice on keeping it simple…
LIFE INSURANCE ADVICE – KEEPING IT SIMPLE
Statistics indicate that one in 29 children will lose a parent before the age of 18. The loss experienced by a family when someone dies is incalculable. From a practical perspective if the main breadwinner passes away, this is likely to be compounded by loss of income.
Similarly, the death of a partner who doesn’t work has its own financial implications, especially where dependants are involved. Fortunately, life cover can provide an affordable solution.
GETTING THE RIGHT LIFE INSURANCE COVER
There are numerous life cover products available. A straightforward level term life insurance policy, where a pre-determined lump sum pays out on death (or under many policies if diagnosed with a terminal illness) within a stated period of time – is among the simplest and most affordable.
Its recommended that life cover protection should provide ten times the main breadwinner’s income. This is paid tax-free, but is added to the deceased’s estate. The policy can be written in trust if there are Inheritance Tax implications.
The level of cover should be calculated considering numerous factors including any outstanding debts (including mortgage), regular outgoings, potential education fees and inflation. The term should reflect the needs of your dependants; children will require financial protection until they leave full-time education and a partner may need the cover to last until pensionable age.
JOINT OR SINGLE COVER?
A joint policy will cover the lives of yourself and your partner, paying out once on the first death within the policy term. Both partners can arrange separate single life policies, which is usually more expensive but would potentially provide two payments.
It’s important to be transparent about your lifestyle, especially if you have pre-existing medical issues. We can help find an affordable policy for most circumstances.
For more information or advice on getting life insurance advice, please contact us. We offer independent advice on many times of insurance including Home & Landlord Insurance and Business Insurance. Clifford Osborne are financial advisors based in Eastbourne, East Sussex serving clients in Brighton, Tunbridge Wells, Bexhill, Uckfield, Heathfield, Hastings and further afield.