Life Insurance is insurance against you dying, when you die your family or loved ones are awarded a lump sum of money, this money can be used to pay your debts, pay your funeral costs or for any purpose the beneficiaries of your life insurance see fit, they are not required to spend the money in any specific way and can do what they want with the life insurance money.
If You Have A Mortgage
If you have a mortgage then life insurance can continue to pay the mortgage each month so your family wonít lose the home that you have worked hard to provide for them, if your very ill then the critical illness cover provided with most life insurance policies will pay out, not on your death but when you have been diagnosed with an incurable disease or other critical illness that you are not going to recover from.
You can get a life insurance quote online or over the phone from an impartial advisor, an advisor will probably not recommend any specific insurance product, they have to be regulated for that but will talk about different types of life insurance that you might like to consider.
Life Insurance Policies
Different life insurance policies offer different amounts of money and have different terms or rules, the policy might include critical illness cover, it might pay your mortgage each month upon your death or critical illness or it might offer a lump sum and pay funeral costs, these are all added options that when you buy the policy you can choose to have if you wish.
Large Lump Sum
A large lump sum might be seen as a windfall for your family upon your death or serious injury, but would it be better just to have the mortgage paid each month without the additional responsibility of spending your life insurance money wisely, at least you would know that the family had a roof over their heads and where being provided for even after your death.
Covering the mortgage is probably one of the most common uses of life insurance, without paying the mortgage each month your family will lose the house (it will be repossessed) and your family will have nowhere to live.
Joint Life Insurance Cover
Joint life insurance cover is insurance cover for the both of you, for a couple, itís often cheaper to get joint cover than single cover and it makes sense that both parents or both couples or husband and wife are covered, especially if both parents work, the money earned by each parent might be significant and greatly affect the familyís finances if one parent were to die.
Additionally, itís not unheard of especially for older couples for the other person to get sick or have health problems on the death of a husband or wife so joint cover means that should this tragic situation occur your children are provided for.
If both parents are responsible for paying the mortgage then joint cover means that the mortgage will continue to be paid when one of the parents dies, it might be considered a little morbid to be thinking about such things now, especially of you are young, but death or critical illness cover is not simply from old age, you might be run over by a car or have an accident at work or one of many other tragic situations that would result in your death, itís better to think about it now than have your husband or wife or children have to worry about how to make ends meet.
Life insurance protects your loved ones, not only yourself or your husband or wife that are insured but those that get left behind in the event of your death, whilst your life has come to an end, they must go on without you and whilst money wonít bring you back it makes the burden of your passing that much easier.
The same can be said for life insurance with funeral cover, you might not be worrying about your funeral now as you might think it doesnít affect you but what about those you leave behind, they will have to find the money for the funeral costs like a funeral plot, coffin, headstone, flowers, catering, travel and outfits, at a time when your loved ones are grieving for your loss, funeral insurance means that they donít have to worry about these costs.
Life insurance with fixed premiums means that your pay the same amount of money over the life of the policy, you might take the policy out for five, ten, twenty or more years and over that time the amount you pay each month will stay the same, the advantage of this is that itís easier to budget for, if you know how much money you need to pay for life insurance each month you can set that money aside, after all the last thing you want to do is be unable to pay the life insurance policy one month and find that the policy has been cancelled.
Itís cheaper to continue a policy over a number of years than it is to take out a life insurance policy when you are old, the further away your death or the least likely your death then your insurance premiums (the amount you pay monthly) will be cheaper.
Over Fifties Life Insurance
For those over the age of fifty there is whatís called over fifties life insurance, these policies often do not require a medical or any other tests and are designed for people over the age of fifty who might be worried that life insurance at their age would be difficult or expensive, itís a special type of life insurance which has already factored in your increased age and typical lifespan, obviously over fifties life insurance might cost more than life insurance when you are in your twenties but the polices offer some of the best deals for the over fifties and will usually offer mortgage protection (if you still have a mortgage, if not this can be removed from the policy) and funeral cover if you want it as well as critical illness cover.
Protecting your family is as easy as getting a quote online, you can compare quotes not only on price but on cover, for example you might not need mortgage protection cover because you donít have a mortgage or have paid off your mortgage, but then you might want critical illness cover if your family have an increased risk of heart disease, cancer or diabetes for example.
Life insurance cover is complicated and you should go to a specialist company of life insurance experts, itís not the same as buying pet insurance and your unlikely to get the same range of cover from an insurance company that does not specialise in life insurance but carries all polices.
Buy from a company of life insurance experts, itís not the same as buying Pet Insurance and your unlikely to get the same range of cover from an insurance company that does not specialise in life insurance but carries all polices.
If youíre unsure about what life insurance policy to buy then speak to an adviser, with a policy that spans decades your be paying the monthly premiums for a long time so itís important that the policy covers what is important to you and can change with your changing needs, for example as a young man or women you might include mortgage protection cover and refuse critical illness cover as you have a young family and the mortgage needs paying each month but as you age and have paid off the mortgage now you donít need mortgage protection but need critical illness cover instead.
Changing life insurance options over time means that you can keep the monthly cost of the life insurance the same but swap out options that are important or less important to you.
Guaranteed Price Match
Life insurance companies will often offer guaranteed price match, but remember they will match life for like, if the life insurance you have a quote for does not include funeral cover and the other policy your comparing with does then it is not like for like cover and the insurance cover is unlikely to want to match it.
Once you know the options you want, critical illness, mortgage protection, funeral cover then itís quick and easy to buy the policy, if you donít want to speak with an advisor then you donít have to.
As you age your choices for life insurance will change, youíre more likely to find policies with funeral insurance and less likely to find polices with mortgage protection as with an older person say the over fifties insurance polices the insurance companies are trying to match one policy to a typical policy holder of a certain age.
When you buy a life insurance policy you can choose to have mortgage life insurance included but the day that you have paid off your mortgage and the mortgage cover is not needed you should contact your life insurance provider and have the cover altered, otherwise not only will you be paying for cover you canít use, the insurance company wonít pay out on a mortgage that does not exist.
Critical Illness Cover
Added protection like critical illness cover can be assessed by your occupation, if you are a builder for example and could potentially fall off a roof and injure yourself then your more likely to need critical illness cover than say an office worker, itís an assessment of risk you have to make for yourself.
A fixed plan is life insurance speak for a lump sum of money when you die, a lot of over fifties life insurance policies are fixed plans offering a sum of money to be paid to your dependants (husband, wife, children or significant others) or anyone else that you specify on your death.
The Beneficiary Of Your Life Insurance Policy
The person that you specify to receive the money is known as your beneficiary, usually you can change the beneficiary of your life insurance policy, for example during the life of your policy you might get married or divorced or a loved one might die themselves meaning you need to change who gets the money.
An increasing plan means that as the years pass the money that will be paid out on your death increases, whilst a decreasing plan means that the money paid out decreases over the years, so on a decreasing plan your loved ones will get more money if you die sooner than later as each year that passes the policy pays out less.
Increasing Plan Or A Decreasing Plan
Whether you choose an increasing plan or a decreasing plan is up to you, the premiums you pay each month will be different for both types of plan, if you believe your closer to death then a policy that pays out all the money sooner might be of interest whilst if you believe death or critical illness is a long way away then a policy that pays out more after several years will be of interest, obviously your current age (young or old) and your current state of health will be deciding factors in the type of life insurance you choose.
Existing customers (existing policy holders) might be able to get a better deal on life insurance, meaning that if you have an insurance product from a specific insurance company you might be able to add life insurance to your policy far cheaper than a completely new policy from another company, for example you might have funeral cover already and to add life insurance to your funeral cover which will be cheaper than a brand-new policy.
The different types of cover, increasing, decreasing and whole of life polices need careful consideration, people who donít understand that a policy pays out more in the first few years (decreasing life cover) might be shocked to discover this many years later, thinking that they had a life insurance policy that would pay out a lot of money and then realising that actually the pay-out is quite small, this will obviously effect the ones you leave behind and can be quite a shock when a recently departed loved one has always told them not to worry about the mortgage as it will be paid only to discover on their death that it is not the case, a lifetime of paying into a policy that then does not pay out will be heart rending so itís vitally important to make sure you understand the options your being presented with on the policy.