What is life insurance, and why is it so important?

Let’s start with the What.

To put it simply: Life insurance is a contract signed by you and an insurance company stating that if you are to die, a pre-agreed lump sum payment would be paid to your estate or maybe your beneficiaries.

You can choose whether this money is paid in a lump sum or regular payments, and what this money will be used to cover. In most cases, life insurance is taken out to cover the mortgage or other debts, but life assurance can alternatively act as an income to help your loved ones pay the bills. Or, if you wish, you can choose a specific plan for covering funeral costs in the event of your passing.

Why is life insurance so important?

The death of a loved one is a terrible thing and is incredibly challenging to get through. Life insurance is so important because taking it out means that your family won’t have to face financial struggles during this already difficult time.

Whilst there is no way to prevent the emotional pain that death causes, you can give yourself peace of mind that you will have prevented any financial strains.

Should I still take out life insurance if I live alone, and my children are no longer reliant on me?

This is a fair question, and the short answer is: Speak with an advisor.

If you have not paid off your mortgage by the time of your passing, your children will be forced to sell your home or take out a new mortgage on the property (if possible). This would suggest that having life insurance may be a good idea because you would leave the property debt free!

Death in service, or Life insurance Safety

In our next blog we will be covering off some really valuable details regarding trusts and how to protect your insurance money in the event of claiming. We have some great examples too of where setting up a trust correctly has helped our clients.

In summary

Life insurance allows you to protect your loved ones financially, even after you have passed.

We highly recommend that all our clients consider the need for life insurance and speak to a qualified advisor. If you are interested in finding out more about life insurance, please call us on 0117 251 0083, where one of our experienced advisors would be happy to answer any questions.

Thank you for reading, and we look forward to hearing from you soon!