One of the things I struggle to understand is the negative attitude towards life insurance. I personally see this product as a family saver as it comes to rescue in the worst situations and makes them a little bit easier on your family. As an independent mortgage advisor I have a duty of care to explain to a client the reasons why life cover, critical illness cover and income protection all have a very important place in the arrangement of a mortgage.
Not that long ago it used to be compulsory to take out life insurance as a condition of your mortgage. However I bet if you questioned the UK population about whether they have their smart phone or their life insured the more likely one covered is their mobile phone. It is frightening that we are rating small electrical items as more important than keeping a roof over our heads.
So why don’t people take such an important insurance out? Most will say they can’t afford it, “it’s too expensive” but surely there’s movement in your monthly budgeting for something this important? Others might say “I don’t need it”? Well there is no telling what the future holds, and I don’t want to put a downer on things but I know I’d rather be sleeping easy knowing that I’ve planned for every consequence.
Another reason might be because people don’t understand how good it is. A life insurance policy pays out a lump sum on the death of the life insured, this can be used to pay off existing debts and usually we recommend cover at least equal to the sum of your mortgage. Grieving the death of a loved one is one of the hardest things we go through in life, and wouldn’t it be so much easier if you weren’t worried about having to hurry back to work to keep the mortgage payments up to date?
Other aspects of life insurance which many do not know about are things like terminal illness cover which pays out if you are diagnosed with a terminal illness and not expected to live longer than a certain specified period. Providing a lump sum in these last moments together can help sort financial commitments early on and leave you and your family to focus on the more important things like making memories. Also waiver of premium benefit, which we always recommend, will pay your life insurance premiums if you are unable to work due to incapacity or sickness, so you can just concentrate on getting yourself better.
So isn’t it time we stopped looking at life insurance as something far too depressing to even think about? It’s true you can’t prevent bad things happening but you can prevent the amount of negative consequences it has on your life going forward, and with a life insurance policy arranged by an independent financial advisor you can be prepared for whatever life throws at you.
Sammy McCann BSc Hons, Cert CII (MP)
18th July 2016
“