insurance
Life Insurance Hub
Life insurance is an important financial safety net that can provide for your family or settle debts in the event of your death.
Life cover is commonly used to protect a mortgage but other policies can provide additional money for your family and dependants. We look at both types and explain how the policies work.
In these uncertain times, we understand the importance of securing your loved ones’ financial future, and we’re here to support you every step of the way.
Think of life insurance as your safety net, ready to catch you in times of need. It’s designed to provide a cash payment in the unfortunate event of your passing or if you’re diagnosed with a terminal illness with a life expectancy of less than 12 months.
Life insurance can be there to ensure the life you have built can go on.
In an era where the cost of living is on the rise, and many of us have less disposable income, the significance of life insurance has never been more apparent.
Whether it’s ensuring that your family keeps a roof over their heads or meeting those ever-increasing bills, life insurance empowers you to provide for the things that truly matter, even when you’re no longer with them.
How does Life Insurance work?
A life insurance policy is an agreement with an insurance company.
In exchange for your monthly premiums, they promise to pay the sum assured (death benefit) to your spouse or family upon your death. These premiums are normally made monthly and are influenced by factors such as your age, health, and the amount of cover you need.
Life policies can protect a single life or joint lives, and they end when a death benefit claim is made.
Most plans will pay a cash lump sum to your family but there are options for this to be a regular monthly ‘income’ payment.
The policy will payout if your death is due to an accident, or medical condition, but insurers will have restrictions should the death be linked to suicide.
What type of life insurance do you need?
Life insurance can be used in many different ways, including for financial planning and estate planning.
But most people have life insurance for one of two reasons:
Mortgage Protection
Mortgage insurance, also known as mortgage protection insurance or mortgage life insurance, is a specific type of insurance policy that is closely tied to your mortgage loan. Its primary purpose is to ensure that your mortgage debt is paid off in the event of your death, allowing your family to retain ownership of their home without the burden of the mortgage.
The amount and length of cover is normally linked to your mortgage, with most borrowers having decreasing cover for their repayment mortgage.
If you die, your mortgage doesn’t die with you, it is left behind for your family to deal with.
Having mortgage life insurance in place will enable the debt to be paid off, leaving your family free of this financial burden.
Family Protection
Family protection insurance would be taken out in addition to mortgage life cover.
It’s primary aim is to replace the income lost when a breadwinner dies. For those thinking about life insurance, determining how much cover to take out can be tricky. The minimum should be enough to clear any outstanding debts.
Even if you’re not the main source of income, your loved ones might depend on the services you contribute. Income replacement can assist them in covering the costs of these services if you’re no longer there.
Whether you’re a non-working stay-at-home parent, part of a multi-earning household, or the primary breadwinner, a life insurance policy can provide financial stability for those you leave behind.
What happens to a mortgage when someone dies?
When someone dies, their debts don’t simply disappear.
After death, the monthly mortgage payments still need to be made, and if you inherit the property, you will be responsible for making the mortgage repayments.
