Many people take out a life policy, perhaps when they take out a mortgage, put it away in a drawer and don’t think any more about it. This can be a mistake, as the level of cover you took out a few years back may now not be enough to cover your current situation, and you could risk leaving your loved ones facing major financial difficulties if you were to die.
Figures from a major insurer show that 40% of Britons only have enough life insurance in place to cover their mortgage1, which could result in financial strain on their families, as they would still have to meet all their other household bills and expenses.
REGULAR REVIEWS MATTER
Everyone should think about reviewing their life insurance cover on a regular basis, especially if they’ve experienced a major life event like starting a family. Having cover just to pay off your mortgage might have sufficed before you had the added responsibility of being a parent, but now you’ll want to ensure there’s sufficient insurance in place not only to pay off your mortgage, but also to provide additional funds to ensure your loved ones could continue to have a reasonable standard of living if you were to die.
When they have a growing family to provide for, many people also opt to take out critical illness insurance. This is designed to pay out a tax-free lump sum in the event of a diagnosis of a serious illness (as defined in the policy). Income protection cover can also be appropriate, as it would pay out a monthly income, tax-free, if you were unable to work due to an illness or injury.
Protection policies can safeguard your finances, your home and your family in the event of incapacity, a serious illness, accident or death. We can help make sure that as your life changes, your cover changes to match your circumstances.
The information within the article is purely for information purposes only and does not constitute individual advice
1Direct Line, 2017