The Benefits of Life Insurance

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Life insurance is something that we are all advised to get at some point during our lives, but why? Here, we outline the benefits of life insurance policies and why you should consider taking out your own cover.

The Main Benefits of Life Insurance

Some key advantages of life insurance include the following:

• It provides financial security for loved ones in the event of your passing.

• It helps deal with the loss of earnings that will affect your dependants.

• It covers unpaid debts (mortgages, etc.) that become the responsibility of family members.

• It can sometimes contribute to funeral costs.

• It gives you peace of mind knowing your dependants will be financially stable when you’re no longer here.

In a period when loved ones should be mourning your passing and grieving in peace, they can be hit with untimely financial worries if you have no life insurance in place.

The people you leave behind will be responsible for covering any mortgages, school fees, council tax, and possibly inheritance tax, etc. that are unpaid at the time of your death. However, a life insurance payout can help to cover these and ease the stress placed upon your family should there be any left-over debts of yours to pay.

People tend to take out a (or update their) life insurance policy when they hit major milestones in their life, including: buying a house, starting a family, reaching a certain birthday, and retirement. 

Why Do I Need Life Insurance?

So, how exactly does life insurance benefit you?

Peace of Mind

It’s really quite simple, but the peace of mind provided is one of the main benefits of life insurance policies. When you take out life insurance, you know that your family will be financially secure when you pass away and that they won’t need to worry about paying for your funeral or covering your debts.

Life insurance enables you to continue supporting your dependants even after you have passed away, which is bound to leave you feeling reassured.

Paying for the Increasing Range of Financial Commitments

In this day and age, we have far more financial concerns, subscriptions and commitments than ever before. The average adult in the UK has a mortgage/rent, council tax, utilities, mobile phone and broadband bills, TV package contracts, vehicles to pay for, as well as a range of other monthly subscriptions depending on their interests and needs.

If you have no life insurance, these issues will become the responsibility of your loved ones if you pass away and they may have to use their own money to cover them.

No one ever really considers the thought of death when they’re setting up a payment plan or financial contract, but sadly, the unexpected can always happen. A good life insurance policy will help your family deal with these types of expenses once you’ve passed away.

Covering Insufficient Savings

It’s been reported that over half of the UK population has less than £5,000 in savings, and one in four adults has no savings at all, perhaps down to the current economic climate and how difficult it is to keep money aside when you have debts to repay and countless outgoings each month.

It’s therefore likely that the average person’s savings won’t be enough to cover the expenses left behind when you pass away, but having life insurance in place will eliminate that predicament.

Life insurance payouts are usually big enough to cover the bills and secure your dependants financially, and you no longer have to worry about always keeping money aside in your savings “just in case”.

Types of Life Insurance and their Benefits

There are a few different types of life insurance policies available through us at Quick Quote Protect; all of which have their own benefits.

Benefits of Term Life Insurance

Term life insurance runs for a specific amount of time that’s been set out by you, so it could last until your children have left home or your mortgage has been paid off, for example.

Its benefits include being flexible and often cheaper than other types of life insurance policies. The main reason for this is that the provider only pays out if you pass away during the fixed term, so it’s less of a risk to them (because hopefully, you won’t die within that term!), which therefore means you pay less for your premiums.

There are two types of level term cover; decreasing term assurance and level term assurance (DTA and LTA) – take a look at our guides to find out more.

What Are the Benefits of Whole of Life Insurance?

Whole of life insurance covers you for the rest of your life and there’s no expiry date, as long as you pay every premium in full and on time.

Your beneficiaries are guaranteed to receive a fixed lump-sum when you pass away, regardless of when that may be.

Over 50s Life Insurance Benefits

Over 50s life insurance is a popular type of policy for people who don’t want the cost of their funeral to be a burden for the loved ones they leave behind.

The benefits include the fact that you are guaranteed to be accepted for the policy, there’s no medical check, you don’t continue paying if you live over 90-years-old but remain covered, and your family is guaranteed a lump-sum payout in the event of your death.

The Benefits of Putting Life Insurance Proceeds in a Trust

Placing your life insurance policy into a trust means that it is safe, secure and the payout is spent on exactly what you intend it to be. It can also help your loved ones avoid inheritance tax if the total value of your estate totals more than £325,000.

If you want to move your insurance policy into a trust, get in touch with our team today and we’ll walk you through the process.

Alternatively, take a look at our useful guides for more information:

• Putting Your Life Insurance in Trust: How Trust Funds Work

• What is Inheritance Tax and How Can Life Insurance Help?

Life Insurance at Quick Quote Protect

If you want to take out a life insurance policy in the UK today, get in touch with us at Quick Quote Protect by calling or completing our short contact form, and one of our advisors will be in touch at a time that best suits you.

If you have already taken out a life insurance policy, you should get a professional to review it every time your situation changes. You can do this through us at Quick Quote Protect today - simply contact us for a free, no-obligation chat about your current situation and we’ll see if you have adequate cover in place – we may even be able to find you a cheaper, better deal!