Life insurance is an optional layer of protection available. As the name suggests, it covers your life, paying out in the instance of your death. This payment is a tax-free lump sum, which can pay off your mortgage or clear debts, for example. Whilst it is not a legal requirement, it can be beneficial to many. In this short article, we discuss the benefits of life insurance and who should consider it. We also explain how Bell Mortgage Solutions can help choose the right cover for you.
Benefits of life insurance
Life insurance’s primary benefit is to offer peace of mind and financial security to your loved ones. It stops the loss of you, and the income you provide, from causing financial hardships for those left behind. It gives them an opportunity to find other income streams following your death, if necessary, easing the financial burden. It can also help cover unexpected costs such as funeral costs.
Who should consider life insurance?
Life insurance should be considered by anyone with dependents, for example your children. This can also be extended to anyone who would struggle financially upon your loss. Your tax-free life insurance pay-out could help cover more than big life expenses such as your mortgage. It may help pay for clothes and food for your family, or help towards university tuition expenses, for example.
It’s worth checking your workplace pension if you are paying in to one. Your pension scheme may include life insurance too. Check the details of your pension to see if the cover provided will be sufficient for your requirements. If so, you may not need additional cover. If not, you can pay into a further life insurance policy. You’re able to hold more than one life insurance policy at a time.
Choosing the right life insurance policy
There are multiple types of life insurance available. Examples include a level-term policy, decreasing-term, over-50s life insurance, whole-of-life cover and joint life insurance. With level-term life insurance, you calculate how much you’d like the pay-out to be upon your death. Using this along with the length of policy you require determines your monthly payments. Whole-of-life insurance, on the other hand, has no fixed length. Payments are continued until you pass away. Joint life insurance is cover taken with your partner.
Life insurance requires a monthly payment to be made. You should therefore make sure that the level of cover you choose is affordable to you in the long term. Life insurance policies can be taken out ‘in trust’. This is something that needs to be chosen when you take the policy out, if your provider offers it. This means that your life insurance pay-out does not become part of your estate when you die. In turn, this means that it will not be subject to inheritance tax.
Bell Mortgage Solutions will help you navigate the often confusing world of life insurance. We’ll help you find the right level of cover for your needs. We provide a personal service for our clients, understanding that everyone’s needs are different. Contact us to begin the conversation.
Looking for other protection products?
Despite our best efforts, life can throw unexpected circumstances our way. Bell Mortgage Solutions have a suite of insurance products that will protect you in your time of need. Along with life insurance, we also offer critical illness cover, family income cover and income protection.
As with any insurance policy, different options are available. We’ll work with you to find the policy that best suits your needs. Contact us now to book an appointment.
The information contained within was correct at the time of publication but is subject to change.
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