If like most people, you want to ensure your family is not left in financial hardship when you die, you’ll want to protect them with a life insurance policy. In this article, we'll focus on permanent life insurance and what you need to consider before choosing to purchase a policy.
Permanent life insurance (better known as whole life insurance) is a form of long-term cover. It protects the policyholder for the rest of their life.
They continue paying premiums right up until their death, at which point the policy pays out a cash lump sum to their loved ones. The amount of money received depends on the sum assured chosen when applying for the policy..
To remain covered, the policyholder must continue paying premiums until they die. One of the main benefits of whole life insurance is that the policy guarantees your family payout, so long as you keep making payments.
If you're considering buying permanent life insurance, here are a few things you should consider beforehand...
The insurance products offered by Cavendish Online have no cash-in value at any time. If you stop paying your premiums your cover will stop, your policy will end, and you will receive no benefit.
What is permanent life insurance?
Permanent life insurance (better known as whole life insurance) is a form of long-term cover. It protects the policyholder for the rest of their life.
What type of policy do you want?
There are two main types of life insurance cover:
Whole life insurance, as we've already mentioned, provides cover for your entire life. However, premiums are generally more expensive than other types of policies, as it offers a guaranteed payout.
Term life insurance works differently, covering you for a set period of time (for example, 20 years). The policy will pay out a lump sum if you die within the term, but if you survive, it expires and you won't receive anything for the premiums paid previously. Unlike whole life cover, term policies are much cheaper, though there is no guarantee the policy will pay out.
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How much do you want to insure?
If you have a family, then you should buy enough cover to protect their future financial needs. If you don’t have any dependents, then you may only need enough cover to pay off debts.
Whole life insurance can help your family with finances, such as:
Living costs
Household bills
Mortgage repayments (see mortgage life insurance)
Childcare support
Funeral costs
It can also act as an inheritance for your children, helping them to get started in life. This could help towards buying their first home or paying off debts, such as a mortgage or student loan. So, if you know you want to leave something behind for your family, then whole life insurance may be a good option.
Can you afford it?
Before you take out a policy, it's important to make sure you can afford your premiums, both now and in the future. If you are unable to pay your monthly premium, your insurer may choose to end your cover early.
Premiums for permanent life insurance depend on several factors, including your age, occupation, health status and lifestyle choices. For example, smokers tend to pay more for life insurance, as they are considered a higher risk to insure. In addition, young people tend to pay less for cover, as they are less likely to develop health issues.
However, premiums are typically more expensive for this type of cover. If you're looking for a cheaper alternative for cover, you may be better suited to a term life policy.
What are your current debts?
You should also take note of your debt situation. Are you paying off loans or credit cards, or do you have a mortgage? All these things should be taken into consideration before buying a policy.
Do you have any medical conditions?
Your health is another factor that affects your premiums. If you have pre-existing conditions, such as heart disease, diabetes or cancer, you may need to pay more for coverage. However, if you've never had a problem with your health, your premiums may be much cheaper.
Get a quote for permanent life insurance
Cavendish Online has a team of experienced advisers, who can compare and provide quotes for you over the phone. Their discounted premiums mean you’ll be receiving expert advice for a lower cost than you’d pay elsewhere.
The insurance products offered by Cavendish Online have no cash-in value at any time. If you stop paying your premiums your cover will stop, your policy will end, and you will receive no benefit.
Speak to the experts...
Give our advisers a call today.
Our team of friendly and professional advisers are on hand to help with any questions you may have regarding Life Insurance.
The advisers can also make recommendations tailored to your current situation and will research the market on your behalf, ensuring you secure the cover you need and supporting you every step of the way.
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