Life Insurance Advice in Beverley

Different Types of Life Insurance

As a Mortgage Broker in Beverley, we have identified a range of Life Insurance policies that are commonly chosen by individuals to meet their specific financial circumstances. These policies include:

Level Term Life Insurance

Term Life Insurance is a type of insurance that provides a payout if the insured individual passes away within a specified period, known as the “term.”

The duration of the term typically ranges from 5 to 25 years, in 5-year increments.

This policy is commonly used to cover a mortgage. It is often aligned with the term of the mortgage, ensuring that if the policyholder were to pass away during this period, the policy would pay out.

This ensures that the outstanding mortgage balance is cleared, relieving the family members or other beneficiaries from the burden of making mortgage payments.

By having Term Life Insurance in place, you can provide financial security for your loved ones, ensuring that they are not left with the responsibility of mortgage payments in the event of your untimely passing.

Decreasing Term Life Insurance

Decreasing Term Life Insurance is a popular choice among homeowners with repayment mortgages, and as a Mortgage Broker in Beverley, we often recommend this policy to our clients.

While some may question the benefits of a policy that decreases in value, it is specifically designed to align with the outstanding balance on your mortgage.

The main purpose of this policy is to provide coverage for the outstanding mortgage balance in the event of your passing.

As you make mortgage payments over time, the outstanding balance gradually decreases.

Similarly, the sum insured by the Decreasing Term Life Insurance policy decreases in line with your mortgage balance.

This ensures that the coverage remains in line with your financial obligations, providing peace of mind that your loved ones will have the means to pay off the remaining mortgage should anything happen to you.

Increasing Term Life Insurance

Increasing Term Life Insurance is a policy that offers an opposite approach to the Decreasing Term Life policy.

With Increasing Term Life Insurance, the payout amount remains fixed throughout the policy term and provides coverage in the event of your passing.

The key feature of this policy is that the insured amount increases over time as the policy term progresses.

This increase is typically aligned with the retail price index or another measure of inflation.

By adjusting the coverage amount to account for inflation, the policy aims to ensure that the payout maintains its value and adequately covers the financial needs of your loved ones.

By choosing Increasing Term Life Insurance, you can have the reassurance that the policy payout will keep pace with inflation, providing your beneficiaries with the necessary financial support, even in the face of rising living costs.

Whole of Life Insurance

While Whole of Life Insurance may not be the most popular option in the insurance market, it is still a viable and convenient policy that may suit your needs.

As a Mortgage Broker in Beverley, we understand that each individual has unique circumstances, and the Whole of Life Insurance policy offers certain advantages.

As the name suggests, this policy provides coverage for your entire lifetime. It ensures that a payout will be made upon your passing.

Unlike Level Term Life Insurance, which covers you for a fixed term, Whole of Life Insurance offers continuous protection throughout your lifetime.

Due to the lifelong coverage, Whole of Life Insurance tends to be slightly more expensive than other policies.

This cost is justified by the fact that you are covered for the entirety of your life, providing peace of mind and financial security for your loved ones.

Joint Life Insurance

If you are married or in a relationship, Joint Life Insurance can be a suitable option to consider.

This policy ensures that a payout will be made in the event of one of the policyholders passing away. While it is also possible to have two separate Life Insurance policies, opting for Joint Life Insurance often offers a more cost-effective solution.

With Joint Life Insurance, the policy pays out when one person dies, effectively ending the coverage.

Some may view this as a drawback; however, if the purpose of the policy is to pay off your mortgage, you would still have access to the funds necessary to fulfill this objective.

The money from the policy will be released after the death of one of the policyholders, allowing you to settle outstanding mortgage balances.

Choosing Joint Life Insurance provides the benefit of shared coverage and potentially more affordable premiums compared to separate policies.

It ensures that financial support will be available to the surviving partner or spouse when it is needed most.

Death in Service

Employer-provided Life Insurance policies are commonly offered as part of employee benefit packages, although it’s important to note that not all workplaces are obligated to provide this coverage.

Typically, this policy functions by offering a lump sum payout to an employee’s chosen beneficiary or family members in the event of their death.

The payout amount can be up to five times the individual’s annual salary. Importantly, there are usually no specific restrictions on how the funds should be utilised.

It’s worth mentioning that the payout from this policy is not contingent on the circumstances surrounding an employee’s death, such as whether it occurred in the workplace or not.

While the availability of employer-provided Life Insurance varies, it can be a valuable benefit that provides financial protection for employees and their families.

It is advisable to consult your employer or benefits department to determine if this coverage is offered and to learn more about the specific terms and conditions of the policy.

Taking out Life Insurance as a Single Homeowner

It’s important not to overlook Life Insurance options even if you are a single homeowner.

Sometimes, single homeowners may forget about Life Insurance, especially if they have recently settled into a new place and are living on their own without children or a partner.

While it may not always seem applicable to single homeowners, it’s crucial to consider whether Life Insurance could provide benefits if your circumstances change in the future.

If you find yourself wondering about the potential advantages of Life Insurance as a single homeowner, our team of Mortgage Protection and Insurance Specialists in Beverley is here to help.

We can provide guidance and information tailored to your specific situation, helping you in making informed decisions about Life Insurance coverage.