LIFE INSURANCE
THE CORRECT LIFE INSURANCE POLICY FOR YOU
What is life insurance?
Life insurance is a way for you to provide for your loved ones financially if you were to die. There is normally a reason for the cover, for example to cover a mortgage or funeral expenses, but this isn’t always the case. We understand that everyone’s situation is different, and whatever the reason for your cover we will make sure we find you the right life insurance policy.
Decreasing, level or increasing?
Depending on your situation, your lump sum (and payments) can decrease, stay the same or increase.
Decreasing cover means that your lump sum (and as a result, your payments) decrease over the term of the life insurance policy. Decreasing cover is normally suitable for covering repayment mortgages, as the sum assured will fall in line with the amount owed on the mortgage.
Level cover means that your lump sum and payments will not change over the course of the life insurance policy. The advantage of level cover is that you know how much you will be paying per month; however it may not be suitable for changing financial commitments such as mortgages or finance agreements. Level cover is often used to cover fixed financial responsibilities upon death, such as inheritance tax.
Increasing cover means that your lump sum and payments will slightly increase each year for as long as the life insurance policy is in force. The main purpose of increasing cover is to adjust the lump sum to keep up with inflation. In simple terms, £10,000 today may be worth significantly less in 25 years. By index linking your life insurance policy you can ensure that your lump sum is able to cover costs when you die, such as funeral expenses or education costs.
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