Protecting your family with Life Cover

Article published on 7th July 2009

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Life Cover is one of the most important forms of financial protection available and can mean the difference between financial security for your family and financial hardship.

The cover itself is another name for life insurance and is a type of insurance that pays out upon your death. The amount it pays is chosen by you and is usually designed to match either your financial commitments like mortgages and loans or to give your family enough of a lump sum to ensure their financial security.

The overall aim of life cover is to provide financial protection but just as importantly, it needs to provide peace of mind for you and for your family!

Lump Sum or Monthly Benefit

Your life cover can be paid out as either a lump sum or in a monthly income known as a family income benefit policy.

Generally the lump sum cover is used to ensure things like mortgages and loans can be paid off in full whereas the family income benefit policy is usually used to ensure a families financial security. The income option also works well for people who want to ensure a specific payment can be made such as their children's education fees.

Avoiding the Tax Man and lengthy delays

Inheritance tax and the lengthy delays of probate can be something of concern to those taking life cover but there is a solution which can both avoid a portion of the payout being taken as tax and speed up the claims and payment process.

An option known as 'writing your policy into trust' allows you to nominate a specific beneficiary and as a result avoids your life cover payout entering into your possessions. Because it does not form part of your estate (your possessions), it is not subject to tax nor to the need to be divided up between your heirs.

The process of probate (dividing up your estate) can be lengthy and consuming, and it is not unusual for the process to take over six months, during which time your family would not receive a payout if the life cover wasn't written into a trust.

Trust writing is a free service offered by Top Quote Online that could cost you upwards of ?300 if you asked your solicitor to undertake the task.

Youth is on your side

Life cover premiums can be dramatically affected by your age and generally speaking, for a healthy individual, the younger you are when you take your policy, the lower the premiums will be.

Premiums don't just increase on your birthday, they can also increase on half or even quarter birthdays depending on the insurance company.

As such the emphasise must be placed on arranging your cover as soon as you can, the longer you wait, the more expensive you may find premiums.

Cover for you and your partner

Protecting your family should not just be about yourself, it should also include the effects of losing your partner. Life cover can be taken even as an individuals policy or as a joint policy where both policyholders are protected on a first or second death basis.

Joint policies will only pay a single benefit which can leave a surviving partner without any cover. Combined with this risk is the case that for most couples taking two single policies can only work out only a few extra pounds and as such represents much better value for money.

Benefits you might already have

Many people forget to take into account benefits they already have such as cover from employers or death in service benefits. Whilst these benefits usually disappear if you change employer, it is worth considering them when you work out how much cover you currently need and saving money on your premiums.

Comprehensive service from Top Quote Online

Top Quote Online offers a comprehensive service for both finding the most competitive life cover quotes on the internet and reviewing your existing cover to ensure it is fully suitable and at the best price available.

Our advisors are fully trained and authorised to offer you independent help and advice on all aspects of your life insurance, critical illness cover and income protection needs.

Click Here for an Instant Competitive Life Cover Quotes



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