So what exactly is LIFE ASSURANCE?
Life assurance is a policy provided by a Life
Assurance Company that pays out either a lump sum or a
series of payments if or when you die.
What types of life assurance are there?
You can either have Term assurance or Whole-of-Life.
Term assurance pays out either a
lump sum or an income (family income benefit plan) if
you die within a specified period of time. If the
policyholder lives beyond the agreed term of the policy,
then the policy will lapse and no money will be paid
out.
Whole-of-life pays out a lump sum
upon death, whenever this occurs . As long as you keep
paying the premiums there is a guarantee that, when you
eventually die, the sum assured (level of Life Assurance
cover) will be paid to your Estate.
Certain types of whole of life policies can have an
investment content.
So what can these life assurances be used for?
Just think how your family would cope financially if
either you or your partner died prematurely. How would
the family pay for the basics in life, ie food, gas,
electricity, water, clothing?
What about those monthly mortgage payments or other
loans you may have? If you have children, what about
those school or university fees ?
If you’re fortunate to have built up other assets do
you want the government taking chunks of your money back
in inheritance tax?
What about the cost ?
It needn’t cost the earth. For example a 30 year old
female (non-smoker) can have £250,000 of a 25 year term
life insurance for £9.11 a month or a 30 year old male
(non-smoker) can have £250,000 of a 25 year term life
insurance for as little as £14 a month. (source- Webline
7/4/2008)
Obviously the price increases as you get older, but
the above examples for a male 10 years older is still
below £30 a month.
How much cover do you need?
The amount of cover
required will depend on your financial circumstances. We
recommend that you
seek
advice from an expert in order to analyse your needs.
Critical Illness Cover
Another type of policy will pay out a lump sum on
diagnosis of a serious illness, for example stroke,
cancer, heart attack, major organ transplant and total
and permanent disability.
This type of cover is known as Critical
Illness cover. The payout can be used to pay
off your mortgage, provide for alterations to living
accommodation, purchase of specialist medical equipment
or provision of ling-term care.
Critical illness cover can be combined with
life insurance and this is very cost effective.
Winston Financial Planning Ltd is an appointed
representative of Virtual Net (Europe) PLC which is
authorised and regulated by the Financial Services
Authority (FSA). Virtual Net (Europe) PLC is entered on
the FSA register (www.fsa.gov.uk/register/)
under reference 209569 The information contained in this
web site is for general information only and should not
be construed as financial, investment or tax advice. The
guidance contained within this website is subject to the
UK Regulatory regime and is therefore primarily
restricted to consumers based in the UK. YOUR HOME MAY
BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR
MORTGAGE.
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