Life Insurance cover provides either a lump sum or an income on the untimely death of an individual. Therefore, anyone who’s death would create a financial loss to another has a need for life insurance cover. This could/should include the following: –
Parties to a Mortgage or indeed a loan (mortgage life insurance cover),
Anyone with dependents (whilst a parent may not work, surely there would be a financial loss if anything were to happen whilst there are young children to be cared for).
Key Individuals. Where a business would suffer financial loss on the death of an essential employee.
In essence any situation where monetary loss would be incurred could possibly have a need for life insurance cover.
Number Of Death In The US Increases Yearly
(Average about 1 per 100 person as of 2020)
Types of Cover
Term Life Insurance
Term life insurance is as it suggests taken out for a specified number of years at outset. With this type of policy you are merely paying for the cover provided based on your age, health and the term. Therefore, it is important to obtain the most competitive term life insurance quote for the cover provided. It is possible to take out term life insurance that will pay level lump sums, decreasing lump sums (mortgage life insurance cover) or regular payments (income).
Whole Life
As the name suggests, potentially, this type of policy will provide cover through an individuals life time. However, when obtaining a whole of life insurance quote, as well as level of premium there are other aspects to be considered, such as investment performance, effect of charges, financial strength of the company.
Which one?
There are good arguments for both type of policy. We would suggest that the following could make up the main considerations: –
Cost – Whole of Life insurance, as a rule of thumb is usually the more expensive type of product.
Period that cover is required – If cover is required for a specific period i.e. a Mortgage then Term cover could be more appropriate.
Future Plans – If, for instance a family is planned, then whole of life can offer the flexibility to increase cover for this or other like events.