Life Insurance

Life Insurance provides a tax free cash lump sum on the death of the life assured and is paid to the nominated beneficiaries.

 

Establishing the amount of life insurance and the type of cover is a complex process that needs reviewing on a regular basis.

 

I have built a calculator to give you an idea to how much life insurance you need to protect your family.

So, how much life insurance you should have?

Life Insurnace is used to cover the following but not exclusively:

 

  • Mortgage

  • Debts

  • Children Education

  • IHT (Inheritance Tax Planning)

  • Key Person Insurance 

  • Provide Your Family An Income

When working out how much life insurance you require, there are two main variables:

 

1) How much will be needed at death to meet immediate obligations?

 

This amount takes into account all final expenses: uncovered medical bills, funeral and estate-settling costs, outstanding debts, mortgage balance and education fees to name a few.

 

2) How much future income is needed to sustain the household?

 

This is the number you’ll arrive at after calculating the “present value” of cash-flow streams your family will need after your death. This cash lump sum can be invested to provide an inflation proofed income.

There are two types of life insurance:

 

Term Insurance: Pays out a cash sum on death if it occurs during the policy term.

 

Whole of Life Insurance: Is a long-term policy designed to pay out a cash lump sum on death, whenever that occurs. They generally have a more flexible structure and an investment eliment.