Life insurance (also known as life assurance, life cover or death cover) is essentially a policy that pays out a lump sum of money to your dependants in the event of your death. The policy will usually pay out no matter what the cause of death is, as long as you are honest and accurate with your personal details at the start of the life insurance application. The amount of money that is paid out depends on the level of cover you decide to buy.
Although Life insurance pays out on death, it is still advisable to consider taking out additional cover to such as critical illness cover and income protection. This can sometimes be built into life cover. Life insurance cannot bring back a loved one, but it can provide reassurance that your dependents will be looked after if you’re no longer around to provide for them.
Do I Need Life Insurance?
Life insurance offers a relatively cheap and straightforward way of ensuring that the financial needs of your family or any other dependents are met in the event of your death. It is usually essential for the parents of school-age children to have life cover and this requirement becomes even more urgent in the case of single parents. Couples without dependents will usually still wish to protect their partner and some people simply want an inexpensive policy which will ensure that their funeral costs can be met.