Many clients have approached us recently to review their life cover, perhaps inspired by all the tragic events that have occurred over the last few months.
When was the last time you renewed your life cover, and what amount would we recommend? The answer will be different for everyone, so we will sit down with you and also work out how long you need it, or want it.
The starting point is to decide what period you need the cover for. For example, it might need to last for as long as your children are in full-time education, or until your dependents reach the age of 18.
We then look at the amount of cover you need and what level you want. We take any existing cover you may have into consideration, to see whether it should be used to discount the need.
It’s always interesting to look at any ‘death in service’ benefits you may be entitled to. People have mistakenly believed that this will pay out if something happens while at work and you can’t claim on it if something happens outside working time – but that’s not usually how it works!
When was the last time you renewed your life cover, and what amount would we recommend? The answer will be different for everyone…
One of the problems with this cover is that it will generally cease if you leave that employment. If your new employer doesn’t also offer death-in-service cover, you will have to consider finding alternative cover.
The availability of life cover is dependent on your health. Depending on your health situation at the time, it may not be possible to obtain the cover you need, so this needs to be factored into the decision.
We would advise you to ensure that there is sufficient cover to repay the mortgage. If you have a repayment mortgage, a cost-efficient cover is mortgage protection. This decreases over time so it only covers the outstanding amount.
On top of this, you could consider level-term assurance which pays out a lump sum. Also, people often forget about family income benefit which pays out an income on death rather than a lump sum and can be a cost-effective solution to ensure an ongoing income.
So, when did you last review your level of life cover? I hope this article inspires you to take action and ensure you’re protected.
At Monetary Solutions Ltd, you can book a free initial consultation about any
financial matters, so please call us on 020 8655 8488.