By definition, life insurance is not something that can help you out on an individual level. So, why you need to make an investment in life insurance? After all, when you are gone, you won’t have to worry about mountains of debt and paying outstanding bills. Sure, you might not be affected personally, but that doesn’t mean you cannot do your bit for your family before you leave. Do you want to leave them in the mire? Of course you don’t, which is why you want to have a look at the reasons for buying life insurance.
Income Replacement
When you die, your income stops. It is that simple. All of a sudden, all the money that was coming into the household ceases to exist. However, the bills that the household needs to pay don’t cease to exist. Just because you are no longer around it doesn’t mean that the energy companies and the banks are going to write off your debts. You and the people you leave behind need to find a secondary source of income to replace the income lost by your debt. With a life insurance policy, you have the perfect backup plan.
The Family
Life insurance is not about you – it is about the people that you love. Everyone is going to die at some point, but that doesn’t mean that your death is going to be easy. Add mounting bills and debt on top of that and the death of a loved one can be crushing. Thankfully, legal and general life cover takes away some of the pain by covering the financial side of your death. Not only does the insurance company pay out a lump sum of money for your family’s financial future, but they also take care of the cost of death. As you are not a selfish person and your family means the world to you, life insurance is essential.
Business Purposes
Do you own a business? If you do, life insurance can help protect the business should any of the key employees die. Obviously, as the boss, you would take a policy out on your life, but you can do it for anyone. Any employee whose death, and subsequent lack of income, negatively affects the business is eligible. What happens when they die is that the insurance company pays out much like they would for an individual policy. In this case, the money goes to the firm to supplement the loss of finances instead of going to a loved one or a family member. Just like your family, you don’t want to see your business crumble when you, or your partner, die.
Tax Loophole
Let’s start this by saying that this loophole is completely legal. In fact, government officials encourage you to take this avenue if you want to keep your money out of the hands of the taxman. By investing in a life insurance policy every month, you are putting money away that is tax-free. As long as the total amount you leave doesn’t add up to more than £350,000, it is not eligible for tax.
