Frequently asked Questions
What level of cover do I need?
This question will depend upon many factors such as the
income of the individual, the tax status of the individual, the size the
size of the mortgage, the size of the individuals family and many other
factors. To give an example, life insurance is often very important as a tax
planning or estate planning tool because the proceeds of a life insurance
policy are often tax free, this is in contrast to other financial vehicles
such as stocks, or property which can be subject to inheritance tax. In fact
the proceeds of a life insurance will often be used to pay the
inheritance tax on an estate leaving the other assets to pass to the heirs
in essence virtually free of inheritance tax. Speak to financial advisor/tax
planner before persuing this strategy.
Is life insurance required for a mortgage?
Life insurance for a mortgage is not compulsory,
but should be considered because life is uncertain and should you be unable
to repay the mortgage due to injury, death or illness your home would be at
risk. If one has the insurance it will provide piece of mind that the
mortgage will be repaid, the debt cleared and you wont risk losing your
home.
What is the difference between Critical
Illness and Life Insurance.
Critical illness will pay out money if you are diagnosed with a critical
illness, while life insurance will pay out if you die. In both cases the
money can be spent however you choose such as paying off medical treatments
or paying off mortgages.
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