Why do people take out life insurance?
Life Insurance is designed to pay out a tax free lump sum should you die or be diagnosed with a terminal illness. The money is often used to clear a mortgage or to give peace of mind that their family will be taken care of financially in their absence.
Often taken out with life insurance is Critical Illness Cover
When people are asked what they understand about Critical Illness Cover they are sometimes unclear as to what it does. Critical Illness Cover was created to pay out a tax free lump sum should you be diagnosed with a serious illness that you are not necessarily going to die from but can be very life changing.
There are 3 reasons why people do not take out Critical Illness cover;
1. They do not know that it is available to them.
2. The “it will never happen to me” philosophy.
3. There are not enough funds to pay for it at the end of the month after all the bills are paid.
Which one applies to you?
Why should you take out Critical Illness Cover?
At Bright we take the individual circumstances of a client into consideration and tailor fit a policy to suit their exact needs and requirements, while still making sure that it is affordable to them. Statistically 1 in 2 of us are going to come face to face with cancer and protecting yourself against this scenario if you have a mortgage or children dependant on you, is very important to consider!
A seldom talked about policy called Family Income Benefit
Where as with a standard life insurance policy pays out a tax free lump sum, the Family Income Benefit Policy is designed to give a tax free replacement income from the point of death to the point your children are no longer financially dependant on you.
How do we explain the importance of this policy?
Imagine that in the corner of your lounge you have a machine that dispenses £20,000 (or the amount you earn) every year…. Would you insure that machine to make sure it keeps working? Of course you would! To your family, you are that machine. Family Income Benefit is a policy that replaces your ongoing income in the event of your death.
In essence Income Protection is buying your own sick pay. It is designed to give a tax free replacement income in the event that you can not work due to any accident, sickness or disability.
If your employer already gives you sick pay, this policy will provide a continued income from the point your sick pay stops to the point you are either better, the policy has expired or you have died.
There are other providers of Payment Protection Insurance [Short-Term Income Protection] and other products designed to protect you against loss of income. For impartial information about insurance, please visit the website at www.moneyadviceservice.org.uk
If you would like advice on how to protect you and your family with the above policies, talk to our Protection Specialists at Bright today on 0800 6 888 222.
This product is also available through other brokers.