What are the benefits of life insurance?

If you’re thinking about taking out a life insurance policy, then it’s possible you may be starting to feel a little overwhelmed by all of the different options available to you.

I’ve previously written a simple guide to life insurance as well as a jargon buster, so if you haven’t read them already then it might help as there is a lot of useful information that will help you understand more about your life insurance options.

In this post I’ve outlined the main benefits that life insurance can provide. Click here to find out more and to get a free life insurance quote.


Life insurance benefits

No-one wants to think about the worst happening, so a lot of us tend to put off getting life insurance. But if you have children and other family members who are dependent on your income, then preparing for the worst-case scenario is crucial. A life insurance policy can provide the peace of mind that your loved ones are able to carry on financially if anything should happen to you.

As well as giving you and your family some peace of mind, a life insurance policy will help support them during a difficult time. The loss of one parent’s income can dramatically impact the lifestyle of the family, and can lead to increased childcare costs and even cause the surviving parent to leave full-time work to look after the children.

The knock-on effects could be that your family are unable to afford expenses that, if you were still around, you could have helped with – from the mortgage on the family home to university tuition fees.

Thinking about these eventualities isn’t nice, but in order to avoid the worst-case scenario for your loved ones it’s important to take control.

Help avoid inheritance tax

Writing a life insurance policy in trust could prevent a big chunk of your money going to the tax man. In the event of your death, your estate (which includes the family home) may have to pay up to 40% tax if it is worth more than £325,000.

If you take out a whole of life insurance policy and write it under trust, then your beneficiaries can receive a cash sum that can be used to pay the inheritance tax bill. Like all forms of tax planning, this is a complex area so Bob’s advice is to make sure you seek specialist guidance before making any decisions.

Bobatoo.co.uk can help you find the right life insurance policy for your needs – find out more and apply for a quote here

Different types of life insurance

The benefits of life insurance covered above all depend on the type of life insurance policy you choose. I’ll be writing a full guide on the different types soon, so look out for that on this blog. In the meantime, you can learn more about what benefits each different life insurance policy offers using the below links:

Term life insurance
Whole of life insurance
Critical illness cover

Use the free Bobatoo.co.uk life insurance calculator to estimate how much you’re likely to pay when taking out a life insurance policy.