The following post about life insurance has been kindly funded by Freedom to Insure. In this article you’ll find out why it’s important to consider life insurance even if you have debts to contend with.
Life insurance is one of those things that many find it easy to put off or decide that they don’t need at all. People often cite their marital situation or a lack of children as a reason they don’t need life insurance, while others believe that taking out life insurance would be a mistake because they have debt and a life insurance plan would pass it onto their heirs. In fact, the opposite is true.
When you die, your debt is not simply written off. The value of your debt is taken in the form of assets such as your car, house or any other belongings of value that you may have – so your family are susceptible to having their home taken from them. Having life insurance will guard against this. Life insurance policies pay out a lump sum in the event of the policyholder’s death, so any outstanding debts would be subtracted from this, rather than taken in the form of the deceased’s assets.
Even if, in the event of your death, your family were able to cover any debts left behind, a life insurance payout could be what they need to ensure funeral payments don’t end up hurting them financially. Alternatively, they could use the sum to take a much-needed holiday, pay off any mounting debts of their own, or put it into a savings account and let it grow. There are no restrictions on what can be done with a life insurance payout – it is intended to ease the burden of bereavement, be it financial, emotional or otherwise.
Life insurance is available in two forms: term life insurance and whole-of-life insurance. Term insurance allows the policyholder to choose the amount of time they wish to be covered for, with the policy paying out should you die within that time. Whole-of-life insurance, as the name suggests, covers the policyholder until they pass away, and is thus the more expensive of the two. If you are taking out life insurance solely to cover any unpaid debts in the event of your death, taking out term life insurance for the duration of your mortgage, loan or other debt may be the answer. This ensures your family will be covered should you pass away, but means you do not have to pay the higher premiums of whole-of-life insurance.
If your debts are preventing you from having the spare capital to take out a life insurance policy in the first place, then contact Freedom to Insure. Their team of fully-trained life insurance experts can compare quotes from the entire UK market – not just their affiliate providers (unlike many other comparison sites) – to provide you with an affordable life insurance quote that’s tailored to your needs. Policies start from just 20p per day, so even if you have debt, with Freedom to Insure there is sure to be an affordable way to secure a future for your family once you’re gone.
This is a funded post from Freedom to Insure. Unlike other price comparison companies who only compare prices from select insurance providers and give misleading prices online, we compare the entire UK market to find the best prices for our customers on life insurance, income protection insurance, ASU insurance, healthcare insurance and more.
*Image sourced from Flickr.