Life Assurance Advice
This can be used to protect income, loved ones and businesses. And, in certain circumstances, it can be arranged to minimise the effect of Income and Inheritance taxes.
Choosing the right kind of Life Assurance depends on a number of factors. Including things like tax, cost, flexibility and the protection required. We’ve explained some popular forms of life assurance below, but with so much to think about, we’d always recommend chatting to us about your circumstances to make sure we find the right solution for you.
Term Assurance
This type of Life Assurance covers you if you die within a specified period. The ‘term’ could be the next 10, 15, or 20 years. But, with this kind of policy you don’t get anything if you live longer that the agreed period.
Couples can take out this kind of policy together – with the cover only paying out once if one person dies during the term. And the cost depends on a number of factors. Such as age, sex and the state of your health.
There are different types of term policy too.
- Family Income Benefit. Designed for parents to provide an income if someone dies at certain time in the future.
- Increasing Term Policy. This is usually linked to the Retail Price Index. The amount you receive rises the closer you get to the end of the term.
- Decreasing Term Policy. Here, the amount paid out reduces the closer you get to the end of the term. It’s often used to protect dependents if you have a mortgage or other large debt.
- Endowment Policy. This is similar to Decreasing Term Cover, but it includes an element of investment.
- Convertible Term. Here you get a choice at the end of the term to convert the cover to a different type of contract, or to extend the term.
Mortgage Protection
This is a kind of Term Assurance specifically designed to repay the amount outstanding on a ‘Capital and Interest’ Repayment mortgage. This means that if the policyholder dies prematurely, the outstanding loan amount on the mortgage will be repaid in full.
Some policies come with extra options, which may include:
- Income protection benefit.
- Unemployment benefit.
- Critical Illness cover.
Whole of Life
This pays out an agreed sum when you die, no matter when that is. These policies tend to cost more than term cover, and they sometimes include an investment element. The cost depends mainly on factors like your age, sex and state of health.
Whole of Life policies can be handy for some people to cater for a potential Inheritance Tax liability.
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