life-insuranceWith Christmas just around the corner, you may be deliberating what gifts to buy your loved ones. Possibly something unique that delivers security, protection and peace of mind? Life insurance could deliver this as a package…

Whether you hate to love them or love to hate them, your family is truly one of a kind and an important part of you. Christmas is that time of year that brings us together. As Sainsbury’s Christmas advert has aptly put it – the greatest gift to your family is ‘you’. Our roles as parents, guardians, siblings and children see us go above and beyond to ensure that our family are safe, secure and happy. By making a small monthly contribution into a life insurance policy you could provide them with a secure safety net that would safeguard them in a time of need.

Life insurance can also provide you with added financial security as an individual, with or without dependants, by protecting your mortgage or offering cover in the event of serious illness. There are a number of policies available, which would differ dependant on your situation, so it is well worth considering what type of policy best suits you and your requirements.

Decreasing term mortgage insurance covers your mortgage in event of death. With this policy, the name says it all. The life insurance will decrease over a specified term to reflect the sum of your mortgage, which will inevitably decrease over the years. As such, the sum insured only looks to cover your mortgage. This is usually a cheaper option for those who do not want their family to have to bear the burden of a mortgage, if the worst were to happen.

Level term life insurance assures you a level lump sum over a specified term. Calculate your mortgage, other debts and costs to decide on the lump sum amount required if you were no longer here.

Whole-of-Life insurance provides cover for your lifetime. The main bonus with this policy is that it aims to cover inheritance tax costs and also offers scope as an investment-linked life insurance.

lifesaveIn order to get the best out of your policy it is also worth considering whether to opt for two policies, one for each partner, or simply one joint policy. The pros and cons of each option varies, so evaluate your individual needs and overhead costs to decide on what best suits you. Essentially two single policies will give you two payments, whereas the joint will offer a single payment on the first death.

Once you have selected the best policy for you it is also worth remembering that any pay out from life insurance is considered part of your estate. It is worth writing your policy into a ‘Trust’. This is relatively easy to do and will not have any additional costs. Trusts ensure that the proceeds of your life insurance policy will be paid to your nominated beneficiaries or beneficiary.

You should regularly review your life insurance needs. Taking time to do so will help you assess whether better rates are available, or if a different policy suits your current situation better.  

For a more detailed analysis of your financial situation and expert mortgage advice why not give our representative Andrew Fagg a call on 07720 353866; or email: andrew@davenportfinancial.co.uk.