Life Assurance

Life Assurance is needed for only one reason - to provide money for people who depend on you. If there is no one who will be financially distressed by your death, life assurance is not needed.

It is normal for the need for assurance to decrease as your family grows up and leaves home. Also, if you create a number of areas of savings, this will obviate the need for life assurance over a period of time.

Remember that both you and your spouse or partner will probably need some life assurance but the amounts would vary, since your income and expenditure will almost certainly be different following one or the other's death.

It is almost always best to have individual life policies for each person rather than joint life policies that pay out only on the death of the first party. In these days of fragile marriages, joint life policies are regularly cancelled leaving both parties needing to re-insure themselves at an older age and usually at a higher premium.

You should also review your life assurance needs every few years as your income and other circumstances alter.

Life assurance can be simply insurance that pays out on death only or there can be an investment element when it is called an endowment. The following are all situations that may require Life Assurance.

Mortgage
To ensure that a spouse and children are not burdened with mortgage repayments, life policies ensure that the outstanding mortgage is cleared on death.

Family
If you have small children then money will help provide for them, perhaps by allowing the surviving partner to stay at home or work part time for some years.

Business Debts
Banks and creditors get worried when key people die. Credit lines get shortened or even pulled, often with fatal consequences for businesses. Your business should insure you to provide cash to settle all debts and recruit a new person.

Business Partners
If you die you hope that your colleagues will pay a fair value for your share of the business, but they can only do this if the funds are available. Insurance is used to provide this.

The good news is that many people already have some life assurance, and that in many cases this will suffice for their needs.

If you are a member of a good company pension scheme read your benefits booklet. You may well find that if you die your spouse and children will get a lump sum and / or a pension. We can calculate the benefits and make sure that they will be sufficient.

If you are not in a good company pension scheme and are self employed, or in business, and have dependants, then it is essential that you have your position assessed. We can help you do this.

What Types of Life Policies are there?
The most basic form of life assurance is Level Term Assurance where you pay a regular monthly amount (Level) for a set period number of years (Term) and, if you die during that period, the policy will pay out a set amount. The advantage of this type of insurance is that it is basic and cheap. The problem with LTA is that it only covers death and, then, only during a defined period. If your health deteriorates significantly during this period, then you will get no benefit and any additional cover might prove very expensive.

There are a wide range of more Convertible and Reviewable Term Assurance policies where you can elect to increase the amount of your cover, increase the length of your policy term or, in other ways, vary or review the terms of the policy without taking another medical. This provides you with the comfort of knowing you will always be able to get cover. However, as you would expect to reduce your level of cover as time goes on, having the ability to increase cover is not that useful and all those additional benefits add to the cost of the policy.

There are also Decreasing Term Assurance policies where the amount of your cover reduces each year. These are generally used as Mortgage Protection policies for repayment-type mortgages but if you are confident that the amount you will need to provide for your dependants is going to decrease over the years then it makes sense to consider this less expensive option.

How much do I Need?
To work out how much life assurance you need contact us using our callback request.

How much does it cost?
Life assurance is generally not expensive. After talking with us we can work out roughly what additional life cover you will need and the approximate cost of providing that cover using various types of life assurance.