Why Have Life Assurance
Life assurance provides ‘peace of mind’ to the person buying a life assurance policy and for their immediate family in knowing that there will be a sum of money to make life easier for those left behind. It’s not easy trying to cope with the death of a close family member when you are suffering from grief and the pain of losing a partner and the possible ensuing financial pressures that may be on the horizon.
Life assurance protection is exactly as it says life assurance; it provides a financial cushion generally for the wife, husband or partner. The money paid out by a life insurance company on the death of their policy holder could be used for some of the following reasons:
- to settle any outstanding debts
- pay for funeral costs
- pay off the outstanding mortgage
- possibly to help pay for any children’s further education
- to provide or replace a regular income
- to provide a nest egg for any emergencies.
Finally knowing that you have these commitments covered does make life a lot easier for the grieving family left behind.
Life Without Life Assurance for the widow or widower
This scenario really does not bear thinking about. The partner that is left bereaved now has the problem of coming to terms with their grief and loss with out a financial cushion. To add to the surviving partners’ grief they discover that their loved ones bank account has been frozen as they did not have a joint account.
In many cases where the wife has just been widowed she discovers that she has little or no knowledge about their household finances as they were always dealt with by their husbands. With no bank account the mortgage cannot be paid and the funeral costs remain unpaid and money runs out fast.
Do I need Life Assurance or Do I not Need Life Assurance
This is the question that most people would rather ignore for as long as they can. Buying life protection is something we would all rather not consider although as responsible adults with a married partner, or an unmarried and or a family it should be our first consideration.
If most people had the facts like one in three or four people will suffer from some form of cancer then they would certainly be more willing to buy life assurance. It’s hard for most people to come to terms with the fact that they will one day die; let alone reconcile the cost of buying life assurance when you the buyer will never receive any personal benefit from it in your lifetime. You never need life assurance until you need it and then it’s too late and you then wish you had bought a million pounds of life protection.
So what Life Assurance Do You Need?
The amount of life assurance required by anyone looking to buy life insurance depends on a number of factors. Your first consideration when purchasing a life assurance policy should start with you thinking about the following questions:
- do you have a mortgage?
- If you died how much money would you need to leave your spouse to pay the monthly bills to continue providing a home for your family?
- how old are your children?
- does your partner work?
- how old are you and your partner?
- How much can you afford to pay each month?
Everybody has individual requirements that are unique to them and their families and should be considered as such. You should always consult a Insurance provider for a full assessment of your needs. Below is a very basic outline of the type of life protection you should consider when looking to buy life assurance to cover your mortgage and to provide an income.
Mortgage Protection Assurance
If you have a mortgage then your will need to cover the outstanding mortgage balance you owe to your mortgage provider in the event of your death. This will secure your home for your family.
Income Protection Insurance
Lets you purchase a monthly income to support your family for a specified period of time in the event of premature death. The monthly payments could continue until the children had finished school or university.
How To Save Money When Buying Life Assurance
Consider buying a joint life first death life assurance policy with your partner as this will provide you with a cheaper policy than an individual life protection policy. This means that the policy will pay out on the death of either you or your partner and will then finish
Also consider a decreasing term policy as this will reduce the overall cost of your life assurance. A decreasing term policy means that the amount of life assurance that you initial required to pay off and your mortgage is linked to the decreasing mortgage balance. So if you were say to die in ten years time then the amount outstanding on your mortgage would be covered.
To gain an even cheaper policy you should consider combining a joint first death insurance policy with a decreasing term.
What ever you do, do something to protect those dearest to you in the event of your death and take out some life assurance today