Life Insurance

 

Life Insurance Explained

 

Our lives are much more pleasurable if we are safe in the knowledge our loved ones will be looked after in the event of our death. It is a morbid but necessary subject when the reality is that if you are not here someone has to take care of the financial commitments you have made in the past. Even if you are lucky enough to not have a single financial commitment to fulfill you will probably want to make sure that your nearest and dearest are as comfortable as possible in your absence. I think we all agree that some form of Life Insurance will make us sleep easier so which type of life insurance policy will suit your needs best?

Term Life Insurance
This is the least expensive and least complicated form of life insurance. Normally termed from 1 to 30 years the beneficiary will receive a fixed sum in the event of the iife insurance policy holders’ death during the term. At the end of the term the policy expires and coverage ceases, you can apply to renew it.

Whole Life Insurance
This provides both death benefit and a dividend. Although a fixed premium is paid, over time the policy increases in tax deferred value so most policies provide a divided to the life insurance policy holder on retirement.

Universal Life Insurance
This is a flexible plan where the life insurance policy holder is able to adjust the benefit/premium mix to suit their current financial needs within limits set by the policy. Skipping payments if during the term is usually one of the flexibilities. The payout is the accumulated value of the life insurance policy at the time of the policy holders’ death.

Variable Life Insurance 
Variable Life Insurance allows the accumulated value of the insurance policy to be tied to the financial markets. This insurance policy allows a higher potential return but there is increased risk as a down market occurs. One of the flexibilities is that you can borrow against a Variable life insurance policy.

I am sure you realise that these terms are merely the tip of the iceberg and that Life Insurance can also be tied to a Mortgage or Personal Loan as protection for the term of the agreement.

Your Financial Advisor will help you fill out a ‘Demands and Needs’ statement to highlight what facets of Life Insurance are necessary for you and what will make you feel more comfortable. Aside from being a fulfillment of F.S.A. regulations this exercise should be taken very seriously as it will probably affect decisions that will change your loved ones futures.

The opinions expressed are those of the author only. The material is for general information only and does not constitute legal, financial or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation by an FSA authorised company where the market is FSA regulated.

 

For more information on life insurance check out;

http://www.asrecommended.co.uk/insurance/life/tips/?FaqID=47

Life Insurance

http://www.asrecommended.co.uk/insurance/life/tips/?FaqID=19