Home Business Insights & Advice Five benefits of owning life assurance

Five benefits of owning life assurance

by Sarah Dunsby
13th Jun 23 2:33 pm

Have you ever considered what would happen to your loved ones if you were to pass away unexpectedly?

Losing a family member is never easy, but it can be even more difficult if they’re the main breadwinner. That’s where life assurance comes in.

What is life assurance?

Life assurance is a type of insurance that provides financial security for your loved ones in the event of your death. It’s typically known as ‘whole of life insurance‘ – which protects the policyholder until their death.

As the cover is long term, the cost of premiums may be more expensive than other types of life cover. Here are 5 benefits of having life assurance in place.

1. Financial security for loved ones

The thought of leaving your family without financial security can be an overwhelming one. But with life assurance, your loved ones will have the peace of mind, which comes from knowing they’ll receive a lump sum in the event of your death.

This money can be used to cover mortgage payments, education fees, and other bills. As such, it can allow them to focus on coming to terms with the loss and supporting each other.

2. Cover for funeral costs

Funerals can be expensive at a time when things are already at their lowest. So the last thing your family needs to worry about is where the money will come from.

With life assurance, you can ensure any funeral expenses will be covered. As a result, it can give your family one less thing to stress about during an already difficult time. This comfort can be priceless and lets them focus on what’s important: honouring your memory.

3. Paying off debts and mortgages

If you’ve taken out loans or a mortgage, then life cover may help to clear these from your estate upon your death. This means any outstanding debts won’t become the responsibility of your family.

A mortgage, for example, can be paid off with the money provided by the policy. This means that your family will no longer have to worry about repaying the balance and can remain in their home.

4. Ability to leave a legacy or charitable donation

Life cover isn’t just about protecting your loved ones. It also gives you the opportunity to leave something for future generations. The policy can leave a lasting legacy, either for your own family or for a charity close to your heart.

You can also use it as an inheritance for your children or grandchildren, providing financial security long after you’ve gone. This may be able to help them buy their first home or start a family of their own.

5. Planning for future expenses

Life assurance can be used to help you and your family plan ahead for the future. As a result, it can help cover any future expenses, such as buying a new home or car.

The amount of cover that you need will depend on your individual circumstances and the level of protection that you require. When deciding on the right amount of cover you should consider all of your potential expenses. This way, you can ensure that your loved ones will have the financial security they need in the event of your death.

Alternatives to life assurance

There are a number of alternatives that may be suitable for those who have different financial needs or requirements. These include:

  • Term Life Insurance: A life insurance policy designed to provide coverage for a set period of time. It’s usually cheaper than life assurance, as it does not offer any additional benefits, such as planning for the future. However, the policy only pays out if you die within the agreed term.
  • Joint life insurance: a type of policy that covers two people, typically spouses or partners. The policy will pay out when either person passes away and can be used to cover debts, mortgages or other expenses.
  • Critical illness Insurance: another form of protection that can help you and your family in times of need. This type of policy pays out a lump sum if you are diagnosed with a serious medical condition, such as cancer or stroke.
  • Family income benefit: pays out a regular income to your family if they die before the end of the policy term. This can help to provide financial security for your family and ensure that all essential expenses are covered.

Ultimately, the right amount of cover will depend on your individual circumstances and financial needs. So if you’re ready to get covered, apply for a quote through our easy-to-use online service. Or if you need advice, speak to one of our trained life insurance advisors.

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