Anyone with dependents should ensure that they have adequate permanent life insurance in place, particularly when they begin to consider major financial commitments such as mortgages. The point of life insurance is to protect the family and/or dependents in the event of the death of the policyholder.
In simple terms, a life insurance policy pays out a specified amount, when the policyholder – usually the major breadwinner – dies. But, as with all major financial policies, there are different types of life insurance and it is vital that consumers do their homework first to make sure they have the correct policy in place for their needs.
Term assurance, for example, is the simplest and cheapest form of life insurance. It pays out if the policyholder dies within a specific period, usually the term of a mortgage. There are different types of term assurance, such as level, decreasing and increasing term assurance, normally based on the specific type of mortgage of the policyholder. But it is important to remember that term assurance is there for the protection of dependents and does not payout if the policyholder is alive at the end of the term.
Some policies allow you to convert to endowment and “whole of life” insurance – this covers the policyholder for the whole of his/her life and not just the term of the mortgage – but they generally tend to be more expensive.
Premiums for all kinds of life insurance vary, dependent on age, health and lifestyle factors such as smoking. People without dependents generally do not need life insurance and should look to other products to protect their mortgage or secure their future financial security.
Home Insurance
Most householders routinely underestimate how much it would cost to replace their home and its contents should either be ruined or lost. Therefore, it is vital that all householders ensure they have adequate insurance in place to protect their homes and their contents.
There are two separate types of home insurance:
Contents Insurance
As you would expect from the name, this type of insurance covers contents, from furniture and electrical equipment to clothes and personal possessions, within your home and garden. Most policies will pay out if your belongings are damaged by fire or flood, or stolen. It’s important to make sure you know in advance whether the policy includes accidental damage.
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Buildings insurance
This covers damage to the structure of the home and to permanent fittings and fixtures such as bathroom suites. So, in the unfortunate event that your home is damaged, or destroyed by fire, flood and water damage, you should be covered for the rebuilding costs of the property. Most mortgage providers will insist that buildings cover is in place before they agree to the loan.
The idea of any type of insurance is to put in place protection against possible loss, damage, and death in the future. Arranging suitable is the same hard work as to build website link building services, cause life and home insurance are two of the most important ways to provide financial security and peace of mind for families and dependents.