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Need has a great deal to do with
why one over the other. If you have a mortgage for example and this
runs for a specified period of time then it stands to reason that
you will only need term assurance to cover you for that same period
of time.
If however you require life cover to cover your family in the event
of death, then that need is unlikely to change regardless how much
time elapses. With that in mind you probably need whole of life
insurance.
All that said you still may not take out whole of life insurance.
Why? well this may be due to cost. Whole of life cover due to the
fact that it does build up a cash value can be a great deal more
expensive that the equivalent term assurance.
A lot of insurance companies are well aware of this fact and as a
result most have an option built into their plans called maximum
cover or minimum premium benefit. What this essentially does is, at
the expense of the fund value it has a reduced premium for a period
generally around ten years. This reduced premium can be quite
considerable in some cases, though not as cheap as term assurance it
does give you cover at a very low rate.
It has to be said a lot of people tend to choose whole of life cover
because they want to have a cash value in the plan in the future
they don't like the idea of taking out cover that at the end if they
haven't made a claim doesn't give them anything back. This is not
the best way to look at or buy whole of life insurance. Yes it does
give you cash in the future but there are far better ways of saving
money and far more effective ones to. Due to the fact that whole of
life cover is trying to provide an amount of money for your
beneficiaries on death its main aim is exactly that. It is not
trying to build up a sum of money so it is not geared around good
investment potential.
With that in mind if your only reason for taking out a whole of life
insurance policy is the fund value then you might be better looking
at a long term assurance plan and a savings vehicle of some sort
maybe even a tax efficient one of some kind.
If however you want life cover that will run for the whole of your
life and be there regardless when you actually die then that is the
main reason for this plan.
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Why not talk
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0845 539 04 04 |
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