Life insurance is an often-forgotten part of proper financial planning and it is something we are quite passionate about.
Whether you are looking for whole of life insurance, insurance to cover a mortgage or purely to provide something for your family after you are gone, there is a wide variety of plans to choose from. We discuss what life insurance really means and some common options.
What is life insurance?
Life insurance is a type of insurance that does what it says on the tin, it is there to protect your loved ones in the event of death or against any borrowing or other financial obligations you may have. It gives you peace of mind that if you are no longer around, your family will benefit from an amount of money and therefore provide them with a degree of financial security.
It is especially important for those with children who are financially dependent, dependant relatives and other family.
What types of life insurance are there?
There are lots of types of life insurance to suit different needs – this is all dependant on your personal circumstances and what you are trying to achieve and therefore protect.
Whether you are looking for whole of life insurance, insurance to cover a mortgage or purely to provide something for your family after you are gone, there is a wide variety of plans to choose from.
Level insurance
The amount of cover that the life assured is covered for, stays level throughout the term of the plan.
Decreasing insurance
The amount of cover that the life assured is covered for, reduces over the term of the plan. This commonly takes the form of “mortgage protection insurance” – as repayments are made on a mortgage, these plans aim to match the outstanding loan amount over the term of the plan at a set rate. By trying to match this level of cover needed, the cost of the cover is often reduced over that of a level insurance plan, only paying for what cover you need over the full term.
Increasing insurance
The opposite to that of decreasing insurance, the amount of cover and premium in an increasing insurance plan increases at a set rate, often used to combat inflation and the rising cost of living in the future. This type of option can be very useful to future proof such an insurance plan for the above reasons.
Whole of life insurance
This type of plan guarantees to pay out an amount of money when you die, rather than cover you for a fixed plan term. These types of plans are often taken out to protect against inheritance tax liabilities in the UK. There are many different facets to this type of insurance and it is important to take expert financial advice when thinking of taking out such a plan.
Over 50s life insurance
Some insurance companies offer what is called over 50s life insurance, this is commonly used to help pay towards things such as funeral costs or to be left as a gift. Generally, these plans are used for people who may be beyond the age of normally being able to be insured, in poor health or who simply want a smaller plan with less stringent medical underwriting.
Where does your financial adviser come in to all of this?
At Osborne Financial, life insurance is a key part of our financial planning, no good financial plan is made without the correct protection for your hard-earnt money and financial assets. It is important when thinking of taking out such plans, that you are not only taking out the correct type of cover for your personal circumstances but an appropriate amount of insurance.
We take a fully holistic and thorough approach with reference to life insurance, taking a look at your personal and financial circumstances and put together a plan of action. We take all of the complication away, putting high quality life insurance plans in place where required and read all of the fine print for you.
Please do not hesitate to contact a member of the team if you would like to find out more about life insurance.
The information provided on the pages, blogs and articles contained within this website are solely for information purposes only and do not constitute financial advice. Professional advice should always be sought from a financial adviser.
