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Independent financial advice - life insurance

Take independent financial advice on whether you could benefit from life insurance

Life insurance is voluntary

Two types of life insurance are 'investment' and 'term'. The FSA advises that for most people, the most suitable type is 'term', which is a policy that pays out during a fixed term. You may get independent financial advice about what term is best to fulfil your personal needs. There are no laws in the UK that require a person to have life insurance. About 40% of the UK's working population are covered by life insurance either through their own policy or via an arrangement through their employer.

Peace of mind

If you have a spouse, partner or family, life insurance can give you peace of mind. When you take independent financial advice, here are some of the things to think about :

  • You have to be a UK resident in order to buy a life insurance policy from a UK based insurance company. This is not a requirement laid down in UK law, but UK laws and tax arrangements make it impossible for a UK based insurance company to offer insurance to anyone other than a UK resident. But be aware that if, having taken out life insurance, you later live abroad, your policy will be invalidated.
  • You should review your policy regularly and take independent financial advice when your personal circumstances change
  • Always write your policy 'in trust', which means that when you die, your insurance money will go straight to the beneficiary and not into your estate (thus avoiding tax liability)
  • Take independent financial advice before considering a joint policy, as it could be that when you die, your spouse will have to take out a more expensive policy

Term insurance

Term insurance is just what it says - the policy runs for a fixed term. If you survive to the end of the policy, it doesn't pay out. You will be taking independent financial advice about term insurance if you want to protect your mortgage or other major debt. There are various types of term insurance policy: level term, decreasing term, convertible term, renewable term, and increasing term. Taking independent financial advice is the best way to pick through these to find which is best for you.

Whole of life cover

Most insurance companies also offer whole-of-life policies. In simple terms, such policies guarantee to pay the sum assured on the death of the insured person, whenever it occurs. Because whole-of-life insurance is not limited to a specific period in the way that term insurance is, premiums are more expensive because the insurance company eventually pays out. When you reach a specified age, say 70 or 80, you may not have to pay further premiums but your cover will continue.

You can have a brighter financial future. If you would like independent financial advice about life insurance call our experienced advisers today on 01424 777 156 or e-mail mike.robertson@mraltd.com