UK life insurance offers invaluable financial protection to your family and dependents in case of your untimely death. It can also be used as a saving vehicle, which, combined with the death benefit, makes life assurance UK unique.
UK Life Insurance: Benefits
Through a UK life insurance policy, one can ensure several benefits. These include:
Family members receive a tax-free lump sum amount even if the policyholder becomes terminally ill. Family members can use the financial protection to meet daily expenses and focus on you.
Most people have pending car loans, house loans, credit card debts and mortgages. Moreover, there may be medical bills to be paid. After the death of the policyholder, these liabilities need to be paid off. At times, these debts have to be paid off by selling the assets left behind, seriously reducing the resources left for their family. With life insurance, the family can repay the loans through the proceeds received immediately after the death of a policyholder.
You can leave behind a significant investment for your heirs with UK life insurance.
Despite its benefits, the importance of UK life insurance is not clearly understood, as reflected by a study conducted by the Post Office and published on August 14, 2008. The study indicates that 75% of people do not have any life insurance cover. The head of protection at the Post Office, Duncan Caesar-Gordon, pointed out that despite the decline in the cost of life insurance by 70% over the last 30 years, 28% of the people surveyed said that they cannot afford it.
UK Life Insurance: Tips
It would be better to opt for a guaranteed life insurance policy, instead of a reviewable policy. While the reviewable policy is cheaper in the beginning, its premiums can be revised over time. Guaranteed policies work out much cheaper over the medium to long term.
Opt to get your life insurance policy written "in trust" and appoint your dependent(s) as the trust members. When the beneficiary of a policy is a trust, the money is quickly sent to trust members in the event of a claim. Moreover, this ensures that the death benefit remains exempt from inheritance tax.
When buying life insurance policies for you and your spouse, buy two individual policies instead of a joint one. Even though it would be a little costly, it will ensure that, in the event of one person's death, the other is not left uninsured.