Who Needs Life Insurance?
Who Needs Life Insurance?
Why Is Life Insurance Coverage Necessary?
For whom is it necessary?
In the event of an individual's premature death, life insurance coverage offers either a lump payment or an income. Therefore, life insurance coverage is necessary for anyone whose passing might cause financial loss to another. The following could/should be included in this: -
Participants in a loan, or even a mortgage (mortgage life insurance coverage)
Anyone with dependents—even if a parent is not employed, providing for little children would undoubtedly result in financial loss in the event of an emergency.
Important People. where the loss of a key person would cause financial harm to the company.
In other words, life insurance coverage may be required in any circumstance where there could be a financial loss.
This year in the UK, 630,000 people will pass away* *source: National Statistics, Winter 2002
Cover Types
Term Life Insurance
As the name implies, term life insurance is taken out for a predetermined number of years at the beginning. You are just paying for the coverage offered with this kind of policy based on your age, health, and the term. For the coverage offered, it is crucial to get the most affordable term life insurance quote. Term life insurance policies can be purchased with flat lump sum payouts, decreasing lump sum payouts (mortgage life insurance cover), or regular payments (income).
Everything in Life
This kind of policy may, as the name implies, offer coverage for the duration of an individual's life. However, there are additional factors to take into account when getting a quote for whole life insurance, in addition to the premium level. These include the company's financial stability, the impact of costs, and the performance of investments.
Which one?
There are valid reasons in favor of each kind of policy. We propose that the primary factors could consist of the following: -
Cost: Generally speaking, whole life insurance is the more costly kind of coverage.
Time frame for which coverage is needed: Term insurance may be more suitable if coverage is needed for a set time frame, such as a mortgage.
Future Plans: If you plan to start a family, for example, life can provide the flexibility to raise coverage for this and similar occurrences.
Take note
These days, Critical Illness (CI) offers an equally significant benefit, and you should definitely study the CI Factsheet.
In summary
This fact sheet should only be used as a general reference for the requirements and available options related to life insurance. It is by no means an exhaustive list of every person's specific needs. Therefore, it would be prudent to use this as a reference and look for more thorough advice from a qualified independent financial advisor. The Financial Services Authority (FSA) regulates and authorizes all advisers, and they must now disclose to you their position (i.e., independent and fee-charging, independent but only compensated on commissions, or tied).
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