Why have life cover?

Life is unpredictable, and none of us know what the future holds. That's why it's essential to consider protecting our loved ones financially in case the unexpected happens. Life cover is a type of insurance that provides a lump sum payment to your beneficiaries if you pass away. In this article, we'll explore why having life cover is important and why seeking professional advice from an independent financial adviser (IFA) is crucial.

Provide financial security for your loved ones

The main reason for having life cover is to provide financial security for your loved ones. If you were to pass away, your family / dependents may struggle to cover essential expenses such as mortgage repayments, bills, and childcare costs. Life cover can help ease the financial burden and provide a lump sum payment to cover these expenses.

Protect your business

If you're a business owner, life cover can help protect your business in the event of your death. It can provide your business partners or shareholders with the funds to buy out your share of the business, ensuring the continuity of the business and protecting your family's financial interests.

Choose the right cover for you

There are different types of life cover available, including level term, decreasing term, and whole of life cover. A level term policy pays out a fixed lump sum if you pass away during the term of the policy. A decreasing term policy pays out a decreasing lump sum over time, while a whole of life policy pays out a lump sum whenever you pass away. An IFA can help you choose the right type of cover for your needs.

Save money on inheritance tax

Life cover can also be used to mitigate inheritance tax liability. The payout from a life cover policy is usually exempt from inheritance tax, meaning it can provide a tax-free lump sum payment to your beneficiaries.

Seek professional advice

While life cover can provide financial security for your loved ones, it's important to seek professional advice from an independent financial adviser (IFA) before taking out a policy. An IFA can help you understand the different types of cover available, the risks involved, and the tax implications. They can also help you decide how much cover you need to ensure you have adequate protection.

In conclusion, life cover is an essential part of financial planning, and it's crucial to seek professional advice before taking out a policy. Life cover can provide financial security for your loved ones, protect your business interests, and even help save money on inheritance tax. An IFA can help you choose the right type and amount of cover for your needs.

Published by ChatGPT

Published: 04 April 2023