Protecting your family against financial hardship should one of you die has become standard practice, and many of us have policies tucked away to be brought out if needed.
There are two important reasons why you should dust off those policies and give them a closer look, to make sure that you are getting maximum benefit from them:

  • Life assurance has become much cheaper in recent years and it may be that you are paying too much. Get alternative quotations to check how your policy compares to others, and if necessary, change it.
  • It may be appropriate to write your Life Assurance benefits under trust. Writing the benefits of a life assurance policy under trust has two advantages:
    • The payment can be made immediately upon the death of the policyholder, rather than having to wait until probate is awarded.
    • The amount paid out is not subject to INHERITANCE TAX (IHT).
  • The cover you have in place may no longer be adequate.

Family Income Benefit

Family Income Benefit is similar to traditional life assurance in that the cover is paid out on death but as an income rather than a lump sum. This means that it is not suitable to pay off debts such as a mortgage.

However, it is worth considering if, in addition to paying off your debts, you want to make sure your family receives an income for a given time should you or your partner die. It’s easy to decide how much cover you might need and for how long. It’s usually quite inexpensive, especially if you take it out while you are still relatively young.

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