Life
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How to Insure a Company Director

How to Insure your Life?

IWhen it comes to insuring your life there is no insurance that can really provide what losing you would mean to those who love you. However, learning how to buy life insurance to make that transition easier on your loved ones can offer some small amount of peace and security.

Do you know how to insure your life to give those you love the most amount of protection whilst keeping the cost affordable? Here are a few helpful pointers which might give you some invaluable insight into just what life insurance cover is and what it can do for both you and those you love.

Understanding the Two Main Types of Life Insurance

The first thing you need to look at when you are considering how to insure your life is whether or not you are looking for an income in your senior years or if you simply want to provide a cash payout for your loved ones upon your death. Level term life insurance and whole of life insurance vary greatly in this regard so it is important to understand the difference between the two.

Term life insurance is a policy that has very specific limits, depending on how much you purchase, and the premiums are based on policy limits. For example, if you feel that your family will need £100,000 upon your death to continue on financially, that policy will cost significantly more than one with a £50,000 limit.

How to Insure Your Life

Term life insurance policies are usually set for periods of years such as 5, 10 or 20 years and they continue in force as long as you continue making timely premiums.

Whole of life insurance, on the other hand, is often much more costly but the policy has both a face value and a cash value.

If you should pass away whilst the policy is in force your beneficiaries will receive the face value of the policy. This amount varies and is selected by you when you purchase the cover.

However, whole-of-life insurance also accrues value over the years and can be cashed in at some future, pre-set date, so that you can use that money as a type of retirement nest egg.


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Weighing Cost against Need

The easiest and cheapest life insurance, then, is term life because there is a set premium that is more affordable and the policy usually only pays out at the time of death and some policies also pay on dismemberment. There are a number of life insurance companies in the UK that carry affordable term life insurance and you can set the policy limits as high or low as you need when weighing cost against need. Most people find that this is more suitable, especially in these trying economic times when disposable income is hard to come by.

On the other hand, if you are one of the lucky few who do have a bit of extra money to pay for life insurance premiums, whole-of-life insurance may provide extra benefits that you can collect even before you die. This is why it is called a ‘cash value’ because at some later point those premiums will payout a cash value up to the specified amount written into the policy. You should also be aware that this type of policy has come under criticism in recent years because financial advisers feel there are more lucrative ways to invest in your future.

If you are looking for affordable life insurance, stick with term life simply because it is cheap enough in current market conditions and can offer your loved ones the financial security they will need to see them through the time after your passing. Whether you have a policy large enough to pay all outstanding debt or one simply large enough to cover your final expenses, the decision is yours. Just take a bit of extra time to compare rates and find the highest limits with the lowest premiums. You will have your own peace of mind in knowing you have protected your loved ones in one of their darkest hours.


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