10 Key Reasons why a Person Needs Life insurance Vs Life Assurance. What’s the Difference?
There is no simpler way to put this than; Insurance is designed to protect you and the family from disasters and financial burdens. The thing is most people are confused between taking out Life Insurance Vs Life Assurance.
Today I feel the need to debunk the two and help you make a potentially life-saving decision. So shall we?
|If you missed my deep dive on Critical illness cover Vs Income Protection you can take a peek here, we’ll wait. 🙂|
Welcome back, and now understand that… There are truly many kinds of insurance…
However, our specialty is personal, business, and commercial insurance.
Personal insurance includes; critical illness, income protection, life insurance, life assurance, private medical insurance, sports cover, mortgages, wills, pension, and funeral covers.
Business insurance includes; relevant life, keyman protection, shareholders
protection, business loan protection, group life insurance, group private medical insurance… And…
Commercial insurance includes; public liability, professional indemnity, Landlord’s insurance, buildings, and contents insurance.
What is the difference between Life Insurance and Assurance?
Life assurance is more often a whole of life policy. The kind that covers you indefinitely and pays out a lump sum once the policyholder dies (assuming they’ve kept up with their monthly premiums).
“Assurance” is meat to be a GUARANTEE that a payout will be made upon the holder’s death. And the product on offer for being paid out is usually the “Whole of Life Insurance“. This type of insurance is almost like an Investment.
To purchase this type of policy, this is where we come in handy as financial advisers. Because it is tailored according to your needs and affordability and not all insurance providers offer it. Remember also, that the premiums are usually a wee bit higher.
Not all insurance providers offer it, for instance. So, the premiums are usually a wee bit high.
Life Insurance on the other hand: is usually a standard life insurance policy that covers you for a set term, for most people. And it is a cover for specific needs.
For instance, it could be attached to your mortgage, critical illness, covering bills, childcare costs, or business/career.
So let’s dive into Life Insurance as it is the more affordable and available product on the open market. And if you need to talk about Assurance, please do speak to a specialist asap.
Why you need Life Insurance
Insurance is designed to protect you and your family…
That said, there are certain financial commitments you need to meet throughout your life, which do contribute in some way to the family income when needed.
Life insurance allows you even in death—to provide for your family a secure the home, help the family meet expenses. So for a while, you could protect your dependant spouse, parents, or secure the children.
Financial obligations could include:
- funeral expenses,
- unsettled medical bills,
- business commitments,
- meeting the college expenses of the children, and so on.
How much insurance you or the next person needs would vary. It can depend on;
- financial needs and sources of income,
- debts, and the number of dependants…
Your insurance adviser or agent could recommend that you take out insurance that amounts to five to ten times your annual income.
It is best to sit down with an expert and go through the reasons why you should consider insurance and what kind of insurance planning would benefit you.
Peekay Finance could be the experts you need to hold your hand in this journey.
As an important part of your financial plan insurance provides peace of mind for any uncertainties in life.
And now to the 10 Reasons Why you need Life Insurance
1. Life insurance correctly planned will on premature death provide funds to deal with monies due, mortgages, and living expenses. It offers protection to the family you leave behind and serves as a cash resource.
2. It secures your hard-earned estate on death by providing tax-free cash which can be utilized to pay estate and death duties and to tide over business and personal expenses.
3. Life insurance can have a savings or pension component that provides for you during retirement.
4. Some policies have riders like coverage of critical illness or term insurance for the children or spouse. There are certain rules regarding eligibility for riders which you will need to determine clearly.
5. Having a valid insurance policy is considered as financial assets that improve your credit rating when you need health insurance, or a home loan, or a business loan.
6. In case of bankruptcy, the cash value, as well as death benefits of an insurance policy, is exempt from creditors.
7. Life insurance can be planned such that it will cover even your funeral expenses.
8. Term life insurance has double benefits, it protects and you can get your money back during strategic points in your life.
9. Insurance protects your business from financial loss or any liabilities in case a business partner dies.
10. It can contribute towards maintaining a family’s lifestyle when one contributing partner suddenly dies.
Why you should have Life Insurance, One more thing:
Insurance is vital to good financial planning and security but you would need to assess your personal risk and long-term commitments.
Insurance stands a person in good stead throughout life and can be used in case of emergencies during a lifetime by requesting a withdrawal or loan.
A term life insurance is the purest form of life insurance one can have.
Unlike most savings tools that grow your money with time or investment tools that leverage market trends to earn returns for you, buying term insurance means ensuring a fixed amount of predetermined death benefits for your loved ones, thus, relieving them of possible economic crisis due to sudden loss of income in the event of your death.
And as financial experts, we:
Assess and manage unique risks.
Tailor an insurance package especially for you.
Apply for and renew insurance policies each year.
Help you settle any claims that you may have.
Don’t you believe it’s worth speaking to an expert on the above matters?
Want a free term life insurance quote? Contact Us for more information.
Pee Kay aka Primrose is an FCA Regulated Financial Advisor and Protection Specialist who helps families protect against life’s biggest financial risks. With tailored advice based on individual needs and circumstances to find the best solutions for you. Book a Chat Today.
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