While death might not be something that we like to think about, the truth is that it is a reality for everybody. And sometimes, death might come too early, causing not only grief, but also financial hardship for families. Life insurance is a product that can help our nearest and dearest with the financial impact if we die, but people often aren’t sure how much it costs or how it works. In many cases, life insurance is affordable, and provides a way to ensure that your loved ones have financial protection.
How Life Insurance Works
When an insured person passes away, life insurance NI provides a payment to beneficiaries. The pay-out may be hundreds of thousands of pounds, or in some cases, more. The money is often tax-free. To get life insurance NI coverage, you will need to submit an application, which generally involves answering some questions about your health. In some cases, you may be asked to have a brief medical exam. If your application is approved, you will pay monthly or annual premiums to the life insurance policy going forward in exchange for coverage. So, why is life insurance important?
In your life, there may be people who depend on you, such as children or even your spouse. If this is the case, then there is a chance that you need to get life insurance. If you are the main breadwinner in the family, then your death would leave your family without your income, which could make it difficult for them to pay the bills and cause financial hardships that might last for years.
Life insurance payments can pay off debts that might otherwise leave your loved ones in a difficult financial position. For example, many beneficiaries use life insurance payments to cover mortgage debt payments or pay off joint loans and credit cards that they had with their spouse. After the death of a loved one, dealing with debts can be a stressful experience, especially if the deceased person was the main bill payer. A life insurance policy can provide cash to repay or put towards debts to make the situation easier.
Cover Funeral Costs
With the average cost of a funeral in the UK standing at thousands of pounds, losing a loved one is not only emotionally painful, but it can also be quite expensive. There are several expenses related to a loved one’s death including paying for cremation or a burial plot, buying a coffin, working with funeral directors, and the service. Cremation is usually cheaper than burial, but most families want to uphold their loved one’s wishes. A life insurance payment can often be used to help with the cost of the funeral, giving your families peace of mind when it comes to giving you the kind of send-off they want for you.
If you have a family, then it’s worth getting life insurance. While death might not be something you think about much if you are young and healthy, getting insured now can protect them should the worst happen.