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im looking at getting life insurance my husband and myself.
can someone please explain what i should be looking for when comparing quotes?
also i have no idea how it works so an explanation about life insurance, the ins and out ect would be great..

someone at work mentioned it today and made me think we should get it! we have every other insurance avaliable! (car, home, phone pet, holidays)

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2 Thoughts on life insurance questions UK?
  1. Reply
    wfr21
    June 16, 2011 at 3:20 am

    It doesn’t matter if you live in the U.S. or the U.K., life insurance is designed to help the surviving spouse and/or family maintain a lifestyle formerly enjoyed when both spouses were living. It replaces lost income and helps a grieving spouse get through life without her/his other half. Life insurance can be used to put food on the table, help pay for braces on teeth and assist in paying tuition for college or university when the insured dies. Death proceed can be applied to reduce or payoff an outstanding mortgage or other debt. If a whole life policy is purchased, it develops a cash build up (cash value) that may be borrowed against in emergencies.
    You may already have some group life insurance provided by your employer but you should consider that “frosting on the cake” and purchase your own because an employer can always change the plan without your consent.

    If you are looking to satisfy a temporary problem like guarantee a college tuition in the event of the death of the major breadwinner or paying off a mortgage, then I’d look at some form of term life insurance but if you want insurance for your entire life,for it to be in effect whenever your heart stops beating, then you should look at some form of whole life or universal life. Tax deferred savings, discounted dollars and tax-free income at retirement or death can make this a good purchase for life.
    You might want to look at http://www.mdrt.org, the website for the Million Dollar Round Table, the premier international organization of financial service professionals, for an agent referral in your area.

  2. Reply
    Jag
    June 16, 2011 at 4:06 am

    A life insurance policy pays the insurance amount to the named beneficiary if the policy holder dies during the currency of the insurance policy. For a family taking life insurance on both spouses is a good way of securing large financial liabilities like mortgage, raising kids etc.

    Generally life insurances can be classified in two categories:
    1. Term Insurance
    2. Permanent Insurance

    If you are taking Term insurance then while comparing quotes go for the lowest premium. But if you’re taking Permanent insurance then while comparing quotes pay attention to cost of insurance, policy fee, administrative expenses, investment options, guarantees involved, MER etc. and most importantly, make sure the policy meets your PURPOSE of insurance.

    Some features of Term and Permanent insurances are given below:

    Features of a Term policy
    – low premium in the beginning
    – cheaper way of covering large financial liabilities like mortgage, raising kids
    – significant increase in premium while renewing at the end of selected term
    – policy lapses if insured lives past age 80 of 85

    Features of a Permanent Life (also called Universal Life/Whole Life) policy
    – coverage available as long as one lives (100 years or more)
    – initial cost slightly higher but may remains constant forever
    – option of paying premium for only 10, 15 or 20 years and policy is paid-up for rest of life
    – it is a good way of leaving inheritance for kids, paying final expenses, paying estate taxes

    Cost of Insurance
    Two types of Cost of Insurance options are Level and Annually Increasing Cost
    Features of Level Cost
    – higher start in the beginning but cost of insurance remains constant forever
    – ideal where the purpose of policy is only coverage of life and not wealth accumulation
    – suitable when the person wants to make minimum payment
    -longevity of insured does not affect the death benefit

    Features of Yearly Renewable Term Cost
    – lower start in the beginning but cost keeps on increasing as long as the insured lives
    – ideal where the purpose of policy is wealth accumulation
    – suitable only if one has capacity to pay higher premium
    – guaranteed paid up option of premium payment for 10, 15, 20 years not available
    – longevity of insured may reduce the death benefit

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