What happens if a breadwinner dies? Most people think that the life assurance benefits often provided by employers will be sufficient. This may not be the case. There are two main types of term life assurance: those that pay out a lump sum on death, and those that pay out a monthly income to the family left behind. In general, we recommend that all debt should be covered by lump sum assurance and all other monthly expenses for the family should be met by monthly income assurance. This is usually the most cost-effective way, and term life assurance is normally remarkably inexpensive. For those with no debts and no dependants it may not be necessary at all.
Lump sum life policies should usually be written in trust to ensure speedy payout and possibly to mitigate inheritance tax. For this reason we regard non-advised life policies purchased in the local supermarket or in a high-pressure bank sales environment with a jaundiced eye, without even considering the issue of good value for money. As ever with financial planning, we believe advice is vital to securing the best outcome.
For more information, call us on 01494 461221 (High Wycombe, Buckinghamshire) or Email: firstname.lastname@example.org