Preparing For The Unexpected

Have you ever considered what might happen to your family if you were to pass away unexpectedly? For most of us, it’s not something we really like to think about too often. But should the unthinkable happen, there are often serious financial consequences to consider.

For example, it is likely that you have a mortgage, and you will have signed an agreement when you took that mortgage out saying that if you were unable to keep up your repayments, the whole property would be repossessed by the mortgage lender. Thus if you passed away, and you were the main breadwinner in your family, it is possible that they would have nowhere to live. If you had outstanding debts to repay, such as hire purchase commitments, car finance, and credit card balances, there may not be a way of discharging these obligations and your estate – i.e. your family – would be liable.

Thankfully we can all protect ourselves by taking out a life insurance policy with someone like Legal & General. There are lots of different options to consider, but life insurance policies fall into two main categories – level term and decreasing term. If your priority is to ensure all financial commitments such as mortgage and other debts were repaid on your unexpected death, thus offering a good degree of financial security for your family, you should opt for a level term policy. This pays out a fixed amount, equal to your initial mortgage amount. So if you passed away towards the end of the insurance term, there would be more money available to repay other debts. Obviously, if you died near the start of your policy term, it is possible that the payout might not be sufficient to cover these.

If you preferred a lower cost option, but still retain peace of mind that your mortgage would be repaid, you should go for decreasing term life insurance, where the sum insured reflects the balance outstanding on your mortgage. A good place to start researching the range of life insurance policies available is the Legal & General website itself, where you will also find links to policy information and details of who to contact if you have any questions. There is also the opportunity to take out one of their high quality insurance products when you have made your decision.

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