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Don’t confuse your life insurance policies

Enable’s IFAs in Bishop’s Stortford find that insurance can be one of those issues that’s overlooked in financial planning.  But it is an invaluable tool for offering some financial peace of mind in more than one set of circumstances.  Level Term life insurance is perhaps the most common and most fundamental form of insurance for protecting your dependents but it is just one type of life insurance, others that do different jobs are also available.

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Another form of insurance; Mortgage decreasing term insurance is a form of cover that pays out to pay off your mortgage should you die within a set term. As your mortgage debt decreases over time, the amount it pays out will also decreases, because of this feature it can also be called ‘decreasing term assurance’.  This also makes it a cheaper form of life insurance than level term life assurance as the insurer would usually find themselves paying a lot less on average to cover these terms. Although it has to be remembered that it does not leave a lump sum for your dependants so that they can cover any other debts and cope with on going spending as a level term life insurance policy would.

Whole of life insurance is another form of insurance which is often but not always an investment-linked life insurance policy it is mainly used to mitigate inheritance tax. With this insurance the amount paid out should be able to cover the inheritance tax bill on death, these policies clearly run out when you die, instead of after a fixed time. If you need help making sure you have the right insurance policies in place Enable’s IFAs in Bishops Stortford can help.

Source: Money Saving Expert

 Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 – Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.

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