Life insurance plan
What is a life insurance plan?
A life insurance plan provides a customer’s family with a large pay out, should the customer unfortunately die. A life insurance plan is commonly taken out by a customer alongside their mortgage, and is commonly used to pay off the mortgage of a customer who has died.
Life insurance plan is really important to those who have any financial responsibility, as it ensures that responsibility will still be fulfilled, even after a customer is no longer around to earn the money to do it themselves.
Why do I need a life insurance plan?
There are many different reasons to take out life insurance, but the most common is to provide for a family left behind. Many families rely on the income and time of two earners, and those single income families would really feel the effect of losing their income through the death of a family member.
A life insurance plan can pay out a large lump sum, which can then be used to pay off a mortgage, and to help with household bills and over costs until the family get back on their feet. A customer can then sleep at night safe in the knowledge that should anything happen to them, at least their family will have somewhere to live, and some money to live from.
Types of life insurance plan
There are two main different types of life insurance plan, although there are many variations on the two plans. A term life insurance plan is life insurance offered over a certain term, but very rarely offered beyond a customer’s 60th or 70th birthday.
Term life insurance plans for this reason are relatively cheap, as the majority of customers live beyond the end of their term. Term life insurance plans cover the customer for their period of greatest financial responsibility, and this is the most popular form of life insurance for this reason.
Whole life insurance provides a life insurance plan for a customer for their whole life and is far more expensive because it will always pay out in the end. A customer who takes out whole life insurance will have to pay at least the value of their payout in premiums over their lifetime, but can at least guarantee a return on their investment.