Personal Finance

Advantages Of Personal Life Cover

  • Tax Breaks: Most life insurance polices include a tax-free allowance that can be paid in each year. The payout, whether it is in a lump sum or instalments, is tax-free. This is also dependent on the total value of the estate, because it could be counted in the Inland Revenues’ calculations for inheritance tax. However if it is written into trust this can be avoided because it makes the pay out completely separate from the rest of the estate. Not all life insurance policies can be written in to trust, so it is advisable to check this before purchase.
  • Peace Of Mind: This is often considered the biggest benefit of having this type of policy in place. You will be reassured that your funeral costs will be covered and your family will not be left with unpaid debts such as loans or credit card bills and the mortgage or rent.
  • Added Extras: You will have the option to add critical illness and income protection cover to your policy if they are not already included on the life policy. This can provide essential protection should you be diagnosed with a long-term debilitating or terminal illness.
  • Regulations: All providers must adhere to guidelines that have been set up by the Financial Conduct Authority and the Prudential Regulation Authority. Each company must have a clear and accessible complaints procedure in place. They will also need to deal with complaints in a timely manner as they are also required to report complaints to the regulatory bodies.
  • You will be able to specify beneficiaries even if you have not created a will. |You can have one or multiple recipients. If the principle beneficiary has already died then the money will be split between those remaining or, if named, a secondary recipient.
  • Most insurance companies provide an online calculator. This is to make it easier for you to figure out exactly how much money you would need to be paid on the claim to provide for your individual circumstances, ensuring your peace of mind and that the safety net in place is strong enough.