
Life Insurance is Taxed
Life insurance payments are exempt from income tax or capital gains. Depending on the value of your estate upon your death, the payment may be subject to Inheritance Tax (IHT).
Putting your policy in trust will ensure that any payouts from a life insurance policy do not become part of your assets, thus helping reduce IHT. It will also help ensure that the amount paid under the life insurance policy can be quickly paid to the right person without lengthy legal proceedings.

Life Insurance Companies Won’t Pay Out the Lump Sum at the End of the Term
You may have heard people say that insurance companies avoid paying claims. However, this could not be further from the truth. Insurers publish their claims figures annually, and in 2019, 98.6% of all life insurance claims were paid.
You can be sure that future claims will be paid and that the claim process will be made as easy as possible for your loved ones.
Here's how:
- When applying for insurance, answer the questions thoroughly, honestly, and accurately. Not telling your insurance company something important when you apply could affect a future claim. Read more here!
- Make sure your family knows that you have got a life assurance plan, as well as what is your insurance company, the policy number and also the duration of the policy. This will make it easier for them to form a claim when the time comes.

Life Insurance Is Too Expensive
The price also depends on the length of your policy – for example, do you want coverage for five, ten or 20 years, or do you perhaps want a whole of life policy – and the amount you want your loved one to receive in the event of your passing away.
Premiums can range in price from a couple of pounds to an average of around £10 per month*, which makes it affordable for pretty much anyone, and is something you should really consider. In the end, it is better to lose a couple of pennies a day and gain peace of mind knowing your family will be provided for, than to gamble with the future of your family by not getting life insurance.
*£10 per month Life Insurance quoted rates are based on level term life cover and subject to individual status and medical underwriting
An advice from Genius James:
You should look for pay-out of six to ten times your annual salary.


Life Insurance Affects Your Credit Score

I’m Too Young for Life Insurance
But if there are people who rely on your income, a life policy is worth considering. If a partner dies earlier than expected, the last thing you need is financial stress or questions about how mortgages or invoices will be paid.
The younger you are, the less expensive your policy will be – and don't forget that that likely means your health will also be in better condition, which means you will get a better deal.
So if you take out insurance for 25 years, with a payout of £150,000, the premium will still cost an average of £10 per month for a person aged 18-29 over the period of that time.
Don't forget that life insurance is only paid in the event of death. It does not cover serious illness or injury.
If you want coverage for these, critical illness insurance or an income protection add-on to your policy is worth considering. You can also get them as a stand-alone policy if that is something that might be more appropriate for you.

You Need a Life Insurance Policy to Take Out a Mortgage
Having life insurance is not a legal requirement for a mortgage!
Often, mortgage providers may try to sell you a life insurance policy, and while I would advise you to protect your mortgage with a life insurance policy, do not take one at a mortgage provider, as they tend to be the worst possible deal for you!

Life Insurance Only Pays Out When you Die
Most providers will include terminal illness benefits as an add-on for free. With this, you are financially protected in case you get a diagnosis with an expectancy to live 12 months or less.
Once you receive payment, your policy will usually end, although this may vary from insurer to insurer.
One of the possible add-ons is also the critical illness cover. This is the type of insurance that will help you reduce financial worries if you get diagnosed with one of the conditions covered by the policy. This doesn’t void your policy, and your life insurance lump sum stays the same.
There is also an option for you to sell your policy, but I would recommend this as the last possible resort.

Annual Health Check-Ups
Another misconception about life insurance I hear constantly is that you will have to have routine medical check-ups after your policy starts.
Don't worry! Once your policy is in place, you won't be required to have an annual health check-up or any check-ups at all.
Before taking out a life insurance policy, you may need to get a medical check-up if your insurer is sceptical about your health situation. In most cases, this happens if you have any pre-existing conditions. Even if you will be required to do a medical exam before getting your life insurance policy approved, it is very simple, and you have probably done many similar check-ups in the past.

