Why life insurance matters – Rest Less

One way couples can increase their levels of protection when it comes to life insurance is to buy two separate policies. Typically this only costs about 10% more than a joint policy.

Having separate cover means that if anything happened to either person – or both – each policy would pay out, providing double the payout for a similar premium.

With joint life cover, the policy only pays out once when the first person named on the policy dies, the other will be left uninsured.

This often happens at an age where the other person is older and may not be in as good health, making the cost of replacing that cover either expensive or impossible.

Never assume that your bank or broker will offer you the best deal as many are usually tied to just one provider and can be expensive.

Like any insurance, always shop around before you purchase a policy.  If you have any pre-existing medical conditions it can be helpful to use a fee free specialist life insurance broker to help you navigate the various acceptance criteria and find the right insurance cover for you.

There are a number of fee free brokers available in the market, but if you’re looking for somewhere to start, we’ve partnered with life insurance expert Teddy Cenaj to offer fee-free advice to our members. All you need to do is book a no-obligation call to get personalised fee-free advice and quotes from the whole market.

Be completely honest in your answers to any questions on an application, for example your medical history, otherwise the policy could be invalidated. You might feel that you are having to give far too much information, but if you hold something back it could really affect whether the insurer pays out in the event of a claim.

Even though there’s usually no income or capital gains tax (CGT) to pay on life insurance payouts, if the value of your estate is more than £325,000, the threshold at which inheritance tax becomes payable, your dependents risk losing 40% of the amount that is paid out.

To avoid this you should talk to your insurance company about writing your policy “in trust”. This will mean it doesn’t form part of your estate, and your beneficiaries will usually receive the money much more quickly. Trusts and inheritance tax planning can be complicated, so it’s a good idea to seek professional financial advice if you’re not sure how best to arrange your finances. You can learn more about how inheritance tax works in our guide Understanding Inheritance Tax.

Author: wpadmin

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