life insurance comments and tips

Sep 23, 2015 | IFA Blog

If you have got some is it enough ? after paying off all debts you should have enough to provide an income for your dependents. You can insure for that income, or for a lump sum to invest to provide that income.

So how much ? well it is not an exact science, but for every £1,000 of income that you think your dependents will need there needs to be capital of £20,000 to £30,000, so do your sums and ask yourself if you have got enough.

If you have got life insurance (whether or not it is enough) is it in trust. It should be. I cannot think of a reason why it should not be (there must be one but ??).

There are 2 reasons for this, one which affects everybody:

If is in trust the life insurance company will pay the claim on sight of a death certificate, so your dependents will get the funds within a few working days – when they are needed, rather than have to wait for probate to be granted, and this  takes months or even more.

The second reason affects everyone with an estate of over £325,000 (single) or £650,000 (married or civil partnership), and remember this includes the value of your house and everything else and the value of the life insurance policy. Putting the life insurance policy in trust keeps it out of your taxable estate for inheritance tax. otherwise having done your how much do I need calculations as above your dependents may see 40 % of that money go straight to the taxman and be 40 % worse off than you had planned

Other bits

Is your whole of life policy really going to be whole of life ?

So you have got life insurance at work, but what happens when you change jobs ?

You have insured your car, your house, its contents even your mobile phone, but what about the person who pays for all that and all the other costs of living.

Your house MIGHT burn down, you MIGHT be in a car crash, your mobile may break when you drop it. BUT we WILL all die. Sorry about that morbid thought but at least plan for it if you have dependents

and of course I welcome your comments

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