Life insurance why there’s no need to be a desperate housewife

 Life insurance why there’s no need to be a desperate housewife

Thinking about what might happen to your wife (or husband) and children if you die is not likely to be a thought you want to think. However, to avoid the problem of making life difficult for your family after your death.

Life insurance seems to make a comeback in the United Kingdom, a period of neglect by consumers who do not export, giving the house. Stabilization of the Kingdom of the housing market has made many consumers to adopt a broader perspective and its finances.

LifeBook research (broker life insurance) in the September issue of Money Observer, highlighted some common mistakes that people make when buying life insurance:

* Believe in life insurance is important for all*

Life insurance is only relevant for people who have financial burden. If you have no financial burden, it might be more appropriate to consider income or critical illness.

* Paying too much for life insurance  *

According to Money Observer, research Sainsbury's Bank Life Insurance revealed that many people take out life insurance for mortgage providers and the result may be paying too much.

* Opting to buy joint life insurance policies instead of single life insurance policies *

The advice to married couples is to avoid taking out joint life insurance policies which pay out when the first spouse dies over the term of the policy, but not on the second. Single policies could provide additional cover by paying just an extra £3-4 a month.  


* Missing out on a trust *

Tax Man can claim up to 40% of your life insurance payout as inheritance tax. According to Money Observer, those with assets totalling £275,000 or more (including a house) are especially prone to tax inspection. Writing your policy in trust is a way to avoid this and as a trust does not have to go through probate, beneficiaries of the policy will receive the payment without delay.




* Only insuring the main earner *

While it is important to cover the main breadwinner, by neglecting to provide even housewife or househusband may incur additional charges of child care. benefits of family income (FIB) may be an appropriate  policy to put in place.

* Opting for a lump sum over income*

If your dependents are likely to require an income, then buying a policy that pays out a lump sum is a mistake. Many people invest lump sums for an income, but when they invest it, they have to pay tax. Family income benefit provides a larger payout – tax free, though the majority of banks and building societies do not offer FIB, so ask an Independent Financial Advisor for recommendations.  


* Not proving full medical records or detailing comprehensive medical history *

Failure to disclose a complete picture of your health, no matter how trivial, could invalidate a claim later.

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