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February 07, 2018

Life Insurance: What Is It and Why Might I Need It?

Life Insurance: What Is It and Why Might I Need It?

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There are some things you may not know about life insurance: it’s (probably) cheaper than you think; you can tailor it to suit you and it can offer peace of mind.

It’s also easy to understand: in return for a monthly payment (maybe as little as £5(i)), your family will receive a lump sum if you die during the term of the plan.

Have you got life insurance?

If you have a partner, children, or if there’s anybody else who relies on your income, you may want life insurance. However, according to research conducted by provider Zurich—and this may not surprise you—we are more likely to insure our pets than ourselves.(ii)

What can it do for my family?

If you die, life insurance means your dependants will receive a lump sum, or regular payments, totalling whatever your cover is worth. Would £100,000 worth of cover be enough? £500,000? You can choose how much is right for you.

Your life insurance can cover a period of time (say, 20 years, or as long as you think your dependents will need to rely on your income), or for the whole of your life.

The proceeds can be used for anything: to clear debts (including a mortgage), pay for funeral expenses or to pay bills. A life insurance pay out can help to cover children’s or grandchildren’s living expenses, university fees and student loans.

You can add critical illness to your life insurance policy. This means a payment is also triggered if you are diagnosed with a critical illness that is covered by the policy (cancer, for example) or if you suffer a heart attack or stroke. Not all illnesses are covered and your insurance company will provide a list of the conditions they cover.

Anything else?

A life insurance policy is tax friendly. For example, the money received from a policy is usually free from income tax and capital gains tax. Also, by putting the policy in trust (which means it will not be considered as part of your estate), the proceeds will not be included when calculating inheritance tax. Please remember that tax is dependent on individual circumstances and tax law is subject to change.

When is the right time?

Some events shape who we are: becoming a homeowner; getting married; having children (or grandchildren); retiring. Even if you have life insurance, it is worth reviewing how much you are covered for from time to time, to make sure the cover remains appropriate.

Life insurance from Zurich

Taking out a life insurance plan with Zurich means that you and those closest to you are protected with quality cover. In 2016, Zurich paid out 98 percent of all their death claims, and with all their plans you and your immediate family will be given the option of free, professional counselling if you need it.  

Find out more information today by visiting Zurich.co.uk

Zurich Assurance Ltd. Registered in England and Wales under company number 02456671. Registered Office: The Grange, Bishops Cleeve, Cheltenham, GL52 8XX.