Life Insurance Cover
What is life insurance cover?
Life insurance cover is an insurance policy that will pay a customer’s family a lump sum in the event of that customer’s death. Life insurance is really important for looking after your financial responsibilities, even when you are not here to earn anymore, and can give you and your family peace of mind that should the worst happen, they will be looked after.
Why do I need life insurance cover?
Life insurance cover is essential if you have financial responsibilities that your family would not be able to fulfil if you died. To work out how important life insurance cover would be to you, simply ask yourself what your family would do for money if you were no longer able to earn for them, and in 95% of cases, you’ll find they would have to give up their house, and start living a different life. Even those who don’t work often contribute in other ways, which would cost money if you weren’t around to do them. Child care for example is very expensive.
The money obtained form a life cover payout can then be used to pay off the mortgage, and to keep the family afloat until they find their feet and work out life without you.
Are there different types of life insurance cover?
Life insurance comes in two different forms. There is whole life insurance and term life insurance, both of which are very popular.
Term life insurance is the more popular of the two types of life insurance, and covers a customer for a term, usually a set number of years, until a certain birthday or until a mortgage is paid off.
Whole life insurance covers a customer for their whole life, and is far more expensive as a result. Because term life insurance is not generally offered to people beyond retirement age, the majority of customers live past the end of their policy, and the insurance company only have to pay out in a few cases. Whole life insurance lasts forever, so the insurance company know they will have to pay out at some point. This means the insurance company must recoup at least the value of the life cover payout during the customer’s life, or they would not make any money at all.