Life Assurance is used primarily:-
To provide money for people who financially depend on you.
If there is no one who will be financially distressed by your death, life assurance is probably not essential, though there are other reasons why it would be useful.
That said, the following are all situations that may require the use of life assurance.
- Mortgage. If the house is to be lived in by your partner or children then it is normal practice to ensure that the mortgage is cleared on death.
- Money for dependants. If you have financially dependant children then money will help provide for them, perhaps by allowing the surviving partner to stay at home or work part time for some years.
- Business debts. Banks and creditors get worried when key people die. Credit lines get shortened or even pulled, often with fatal consequences for the business. If you are a key person your business could insure you to provide cash flow to settle all debts and recruit a new person.
- Business partners and co-directors. If you die you hope that your colleagues will pay a fair value for your share of the business, but they can only do this if the funds are available. Assurance can be used to provide this.
The good news is that many people already have some life assurance and in many cases this will suffice for their needs, although as needs and circumstances change, it may need updating.
If you are a member of a good company pension scheme, read your benefits booklet. You may well find that if you die your spouse and/or children will get a lump sum and/or a pension. If you provide us with the details we can calculate the benefits and make sure that they will be sufficient. One problem with some old fashioned schemes is that unmarried partners are not always treated as a spouse.
You have probably already got life assurance to cover your mortgage, but it would be worth checking that the current level of cover is sufficient for your current situation.
If you are not in a good company pension scheme and are self employed, or in business, and have dependants, then it is essential that you have your position assessed. We can help you do this.
Your home may be repossessed if you do not keep up repayments on your mortgage.
These days, for people of working age, good health is the normal state, and few people consider what would happen if , due to ill health, their career was interrupted or even stopped. For others, the risks are of frailty in old age.
This group of insurances covers all these issues - from getting fast and effective health care, to providing lump sums for more serious problems, to providing income where long term ill health prevents you working, to providing for the (potentially life savings destroying) cost of old age care.
In short, they are all about maintaining your Quality of Life in adverse circumstances.
For details of our fees for mortgage advice please see our How we are Paid page.