life insurance is a widely established way of providing a tax-free capital
sum if the policyholder dies whilst the policy is still valid.
life insurance does not have any investment value - if the policy finishes and
a claim hasn't been made, there is no payout.
You need to think about the following:
- How much you want to insure for
- How long you will be covered for
- Whether you need cover for Joint or Single lives
- Whether you want a Guaranteed or Reviewable policy
Be aware of the following points:
- If you are insuring your mortgage then you must insure in relation to the
amount you owe your mortgage provider.
- Most Insurance Companies regard 2 years as the minimum for a life insurance
policy, but 20 - 25 years is the most common policy length.
- Most Insurance Companies will not offer insurance past the age of 70, and
if they do it will be extremely expensive.
- Terminal illness cover will probably be automatically included in your policy
at no extra cost.
For more details on all the above have a look at our other FAQs which go into
more detail:
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