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A Guide To Life Insurance

There are so many insurance policies that you can take. One of the most important covers you need today is the Life Insurance. From the name, a Life Insurance covers your life. The policy is meant to protect your dependents when you are no longer with them. You can also use the insurance cover as an investment avenue.

1. Who needs or doesn’t need Life insurance?

Everybody of average income needs a Life insurance. The policy is beneficial to individuals who are not independently rich. If you have dependents and your income is not that sustainable, you need Life insurance. The policy is not only important to you but also to your family members. There are few exceptions when it comes to obtaining the policy, and they include:

• An individual who has raised his or her kids, and they are living on their own
• An individual who is young and not married.
• An individual with the financial muscles to support himself/herself and the family members

2. What are the Different Types of Life Insurance?

A Life insurance policy can either be a Term Life or Whole Life. A Term Life Policy provides benefits to the beneficiaries when the policyholder dies. On the other hand, a Whole Life policy has an additional advantage to the death benefits obtained from Term Life. You can cash the amount accumulated over time.

Normally, a Term Life Policy requires you to pay fewer premiums, and the process is not complicated. The contributions towards this contract guarantee that your family members will be paid a specific amount in the vent that you die.

The insurance acts like a parachute as it covers the members of your household against uncertainties. Taking up a Term Life is more like signing a business contract, and the agreement is between you and the insurance company.

You are expected to contribute promptly, and the company is required to keep their end of the bargain. The only concern is that the contract can expire without you gaining anything, in case you survive the term. With this policy, you can renew the term on a yearly basis as per the time length that you want.

With respect to the expiry of the two options, the Whole Life policy does not expire. The program remains active if you live. What this means is that you are entitled to contribute to the insurance in your entire life, unless you decide to cash in the benefits. The policy also depicts the signing of a contract between you and the insurance company. Both parties are legally expected to comply with the regulations of the agreement.

3. What are the Additional Comparisons between the Two?

The following are the clear differences between Term Life and Whole Life Policies:

• Commitment: The Term Life policy requires less dedication than the Whole Life. If you are healthy and do not grow old fast, you have the freedom of cancelling the Term Life contract. As for Whole Life, it’s not advisable to cancel the contract as it’s meant to be a permanent one.

• Cash value: The Whole Life policy has more cash value than the Term Life policy. The cash security is what makes Whole Life worthwhile. On the other hand, in Term Life, the real cash value can only be triggered when the policyholder passes away. Your dependants are the ones to enjoy the returns and not you.

4. What are the Basics of Taking up Life Insurance?

Before you buy a policy, you must keep four things in mind. One, the insurance policy is a contract. This means that there are rules to be followed. Therefore, you shouldn’t sign a contract that you don’t understand. Secondly, the policies are commodities that are sold. There are professional experts (sales agents) involved in the insurance selling process.

Thirdly, an insurance policy, especially Whole Life, is an investment vehicle that you can take up. Lastly, Life Insurance is a way to cushion yourself and your family against life risks.

In a nutshell, if you’ve not taken up a Life insurance, it’s time to do so. Life is full of uncertainties, and nobody can tell what will happen to your dependents when you are no longer with them.

7.8% APRC Representative

Representative example: Assumed borrowing of £37,700 over 180 months, with a fixed borrowing rate of 6.4% per annum for the first 36 months, followed by 144 months at the lenders standard variable borrowing rate of 5.9%. There would be 36 monthly instalments of £356.89 followed by 144 instalments of £347.59. Total amount payable £63,021 comprised of; loan amount (£37,700); interest (£21,791); Broker fee (£3000) Lender fee (£530). This would result in an overall cost of 7.8% APRC.

 

Accepted.co.uk is a trading style of Paloma Digital Limited. Paloma Digital Limited is an introducer and we will search our panel of brokers to find the right loan for you. Data Protection Registration Number: Z9868049.

Paloma Digital Limited is authorised and regulated by the Financial Conduct Authority. Firm registration number 769794. See www.fca.org.uk

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

 

7.8% APRC Representative

Representative example: Assumed borrowing of £37,700 over 180 months, with a fixed borrowing rate of 6.4% per annum for the first 36 months, followed by 144 months at the lenders standard variable borrowing rate of 5.9%. There would be 36 monthly instalments of £356.89 followed by 144 instalments of £347.59. Total amount payable £63,021 comprised of; loan amount (£37,700); interest (£21,791); Broker fee (£3000) Lender fee (£530). This would result in an overall cost of 7.8% APRC.

Accepted.co.uk is a trading style of Paloma Digital Limited. Paloma Digital Limited is an introducer and we will search our panel of brokers to find the right loan for you. Data Protection Registration Number: Z9868049.

Paloma Digital Limited is authorised and regulated by the Financial Conduct Authority. Firm registration number 769794. See www.fca.org.uk

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.

Paloma Digital Ltd. Company Registration No. 6934249. Registered Office: Office 229, 275 Deansgate, Manchester M3 4EL.