What is Life Assurance?
Life assurance pays out a tax-free sum to whoever you choose when you die. However, life assurance usually covers the policyholder for their entire life – so it’s also known as ‘whole of life’ cover. Unfortunately, death is one of life’s certainties, so a payout is guaranteed – meaning that premiums for life assurance policies tend to be higher than for life insurance policies.
With life assurance policies, your cover can increase if you choose, but not decrease – and although your premium is likely to be higher, you have the peace of mind that comes with knowing you have cover for your whole life.
How does Life Assurance work?
Life insurance enables you to be proactive about ensuring those you care for can meet those financial commitments after you've gone. Decreasing cover life insurance is a type of cover that helps if you have a repayment mortgage or other sizeable reducing debt. The longer your cover is in place, the less is paid out.
Why would Life Assurance be important to someone like me?
Not everyone needs life insurance (also known as life cover and death cover). But if your children, partner or other relatives depend on your income to cover the mortgage or other living expenses, then the answer is yes – you probably do want life insurance, since it will help provide for your family in the event of your death.