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| How
Much Cover Do I Need With Term Life
Insurance? |
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Unfortunately there is
no right or wrong answer to the above
question. The amount of cover needed for
one individual is totally different for
another individual. Term Life Insurance
is the cheapest form of life insurance
and is often used for mortgage
protection and family protection. For
this reason to ensure both the family
and mortgage are adequately covered one
should look to insurance them both
separately. That is if the insured has
both a family and a mortgage.
To illustrate the above a brief example
will be given. Jane and John are married
and have a £100000 mortgage over 20
years on a repayment basis. They have 2
children Mary who is 12 and Robert who
is 14. Below I will show how much cover
would be required for each area.
The cover needed for the mortgage would
be a term life policy with term of 20
years. The sum assured should be set to
the same amount as the mortgage owing
i.e. £100000. The cheapest for of cover
to do this would be
decreasing term life insurance.
Depending on what the couples budget is
they should also have
Critical Illness Cover as an option
on the policy.
How much
Term Life Insurance cover is
required for the family. This question
is a bit harder to calculate. It will
depend on Jane and John's priorities and
goals. However They have told me that
they would like cover to last until Mary
is 21 i.e. for 9 years. They expect that
by age 21 both of the children will be
working and no longer be dependent. Now
both Jane and John work and earn £25000
each per year. One way to cover this is
to do a policy for 9 years times £25,000
i.e. £225000. However because the sum
assured would be paid in a lump it would
be invested and they may be able to go
for a lower sum assured.
Other things to consider is whether or
not the sum assured should be
decreasing or
level, and whether the policy should
be a
joint term life insurance or 2 single
policies. Also
should the insurance be written in trust
or not.
The best way to work out how much cover
is required and what term life insurance
options are best is to use a financial
adviser. A professional like this will
shop around the market and find the most
suitable cover for you. To enquire use
the form on the right.
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| Quotes in 3 easy steps: |
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1. You complete the simple form
2. We search the whole of the market
3. You receive quotes |
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- Cover starts from as little as *£5 per month
- Quotes are FREE and without obligation
- We can put policies in trust for
free.
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| We compare the leading insurers including: |
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Useful Website Sections: |
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Popular Term Life Insurance Articles: |
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*£5.00 Per month quote based on 25 Year
old female Non Smoker for £102,740
guaranteed level life cover only for
term of 25 Years.
**Take out life insurance before 31st
December 2011 and receive a £25.00 gift voucher. Voucher sent
once 3 months premiums are paid. If you
cancel within this period the voucher
will not be paid. One voucher per
customer. |
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