By taking out a life assurance policy with an insurer, you will guarantee the financial upkeep of your family in the event of your death. From mortgage repayments to other household expenses, they won’t suffer from any financial complications left over from your passing.
Should you take out a life assurance policy?
If you don’t have a family to consider, and if you have no other beneficiaries, then no, you won’t need to take out a life assurance policy. You might also rule out the option if there are no outstanding financial commitments within your household, or if your family are able to get by without the payout given out upon your death.
However, if other people are dependant on your income, then it needs to be something you seriously consider. The money can then be distributed to the beneficiaries mentioned in your will, and they will have the opportunity to benefit from the policy that you had taken out.
But what about life insurance?
Many people confuse the two, as life assurance is also known as ‘whole-of-life’ insurance. Traditional life insurance, however, is known as ‘term life insurance.’
To protect the needs of their family members, many people take out term life insurance. Their beneficiaries will then receive a lump sum of money to help them manage such things as mortgage and credit card repayments, as well as any other expenses that would otherwise be hard to cover after the loss of the policyholder.
However, there is one key difference between term life insurance and life assurance
With term life insurance, your beneficiaries will only receive a payout if you die during the term of the policy. If you were to die outside of that policy, no money would be received.
With life assurance, on the other hand, your beneficiaries are guaranteed a payout, as there is no fixed term with the policy you pay for. So, no matter when you die, your family members will receive the financial benefits owed to them through the insurance you took out.
The only downside to life assurance is the higher cost of your premiums. This is because your family is guaranteed a payout.
Still, you might consider the extra payments worth it, as your family will then have the financial cover they need to support themselves after your death. You will also have the added peace of mind that, no matter when you die, you won’t be leaving your family short of money.
Should you choose life assurance? Or would term life insurance be a better option for you? It depends on your finances and other aspects of your personal situation.
We are here to help you make the right decision, so for advice on all aspects of term life insurance and life assurance, as well as other insurance options that could be beneficial to you, contact our friendly team of professionals for some experienced advice.
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