Why You Need Life Insurance Cover
Life insurance is not mandatory. Yet a wide range of individuals opt to have Life insurance cover.
A death in the family can have serious financial consequences. The basic role of life insurance is to provide financial support. It can also pay off an individual’s debts when they die.
Many people think of life insurance as providing a lump sum. However it can, depending on the detail of the policy, provide a regular income. This is known as Family Income Benefit or ‘FIB’.
Some policies only provide cover for death and terminal illness. . However policies can be structured to incorporate critical illness cover. This means a policy will pay out if yo are diagnosed with a specified critical illness. This cover can help you if you are unable to work and require an income.
Families whether they are reliant on two incomes or not, could consider whether life insurance may be beneficial. If one partner stays at home life insurance can also be tailored to cover the costs needed to manage the home. It can also be used to help inheritance tax planning through the use of trusts and various schemes.
Couples who work, but who have no children or other dependents, may decide they don’t need life insurance but opt for critical illness cover on a standalone basis. On the other hand couples who run a business together may take a different view on what provision they need.
But it’s not just couples and families who take out life insurance.
Individuals with no dependents may use life insurance to settle their own affairs on their death i.e. pay for their own funeral expenses or pay off their mortgage.
It’s also possible that a single, high flying professional with elderly parents on low or fixed incomes may decide to take out cover so their parents are provided for.
If you don’t have cover or your circumstances have changed, your first port of call should be to obtain qualified, independent advice.