Exploring Whole Life Insurance in the UK
Life insurance isn’t the world’s hottest topic…but it should be. After all, who can truly put a monetary figure on the path to getting peace of mind for their family? We just don’t know what’s going to happen in life. We just don’t know what will honestly occur in the weeks, months, and even years to come. So we have to do the best that we can to get everything done. We have to do the best that we can to line up all of the pieces. We have to do the best that we can to really make sure that you are taking care of just about everything that needs to be taken care of. You have to control your life even when it feels like everything is out of control. This is not something that can be handled lightly. You have to go in with your whole heart, and that’s just the way it is.
You have to make sure that you’re getting insurance that’s going to last for the long run. If you thought that term insurance was the only type of insurance that you could honestly have, you might be blown away by the number of real choices that you have.
Whole life insurance is permanent insurance — there’s no cancellation date during your lifetime. When you die — whenever that is — the benefits will be paid out.
However, what makes whole life insurance stand out is that it’s guaranteed. No matter how sick you become in life, the insurance policy will still give your family the peace of mind that they deserve.
It lets you leave your family with a lump sum that is tax free, which is definitely. helpful. After you pass, your family will naturally be crushed by the weight of your departure. They will be crushed on an emotional level, but they can also be crushed by financial struggles. This is even more the case if only one person is working — you. Could you family really move on without you quickly, from a financial perspective? You will need to make sure that they can.
There’s also two types of cover that you can look at when it comes to whole life policies. The first one is known as maximum cover. This is where the initial premiums and sum insured are both guaranteed not to go up for the first 10 years. After this initial period, the plan is reviewed. If it comes down to it, the insurance company has the right to raise your rates.
There’s also balanced cover, which aims to balance the level of life insurance with enough investments to cover the premiums in later years and maintain the original premium for the rest of your life. This is based on the assumption of the value of units invested in a fund attached to the policy. The fund needs to grow at a certain percentage rate every year to keep up.
Poor performance of the fund could end up with higher premiums, but that’s a risk that many families are willing to take. This is definitely going to be a much more expensive form of life insurance, so you will need to budget accordingly. Hopefully in 10 years from the signing of the policy, your family will be in a much better position in terms of finances — that’s plenty of time to collect some raises from work, you know.
Are there cons to whole life insurance? Certainly. The cost is one thing, not to mention that the premiums can indeed go up under the balanced cover plan. However, the balanced cover plans do let you also build a savings vehicle. It’s based on the strength of the insurance company as well. If you go with an insurance company that has been paying out business dividends for a while, then you’re going to be in a much safer position than going with a company that just started offering whole life.
Check out your options based on your own unique situation. Why not check it out today? You’ll truly be glad that you did!