Protection for your Family
It’s unthinkable, we know, but there could be a day when you are no longer able to provide financially for your family. To care for their needs then, you might want to consider two types of insurance policy.
- Family Life Insurance
- Family Critical Illness Cover
Even if nothing were to happen to you, you would still have the peace of mind knowing that your family would be cared for during the terms of your policies.
Family Life Insurance
If you were to pass away during the term of your policy, a lump sum would be paid to your family. They could then use this to pay off the mortgage, pay off any other outstanding debts, and cover any other regular expenses.
You should especially consider such coverage if your family had no other income coming in and if your passing would mean they would be placed in dire financial straits.
When choosing a policy, you will normally be offered three options.
- A level-term policy
- A decreasing-term policy
- A whole-of-life policy
With ‘level-term’ life insurance, you pick the amount of the sum insured, and the amount paid out will be the same, regardless of whether the claim is paid out near the beginning or end of the policy.
With a ‘decreasing-term life policy,’ the amount that will be paid out will decrease over the length of the policy. This is reflective of the money you will have already paid off to meet your long-term financial commitments.
With a ‘whole-of-life’ policy, your family will receive a lump sum, no matter when you die. This is often more expensive than the other policies mentioned, as there is no specified time for the policy to end.
When choosing family life insurance, you can take it out as a single-life or a joint-life insurance policy. A single-life policy can be taken out by single parents or one half a relationship, and a joint-life policy can be taken out to cover both people. You also have the option of taking out two single-life policies to cover both sides of the relationship. There are pros and cons to each, so speak to your insurance provider to find out what is right for you, or contact us here at Blue Strawberry for an in-depth discussion of your needs.
Family Critical Illness Cover
Some insurers will give you the option of including this with your life insurance, so it’s something worth considering.
Critical illness cover will pay out a tax-free lump sum of money to you should you be diagnosed with a severe illness, or should you suffer a debilitating injury. The money can go towards paying off your mortgage, and any other expenses that you might otherwise have difficulty in paying if you were forced out of work because of your situation.
Before taking out cover, it is worth investigating the small print on the insurance policies offered to you. Not every illness is covered, as some are considered less severe than others. Shop around until you have found the cover that will meet all of your family’s needs.
For further advice, get in touch with us using the contact details you can find on our website. We will give you more information with regards to both insurances covered here, as well as further advice on other types of insurance that you might want to consider.