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Life Direct is a trading name of Veritass Limited, 1 Lidget Mill, Oakworth, Keighley, West Yorkshire, BD22 7HN.
Veritass Limited is authorised and regulated by the Financial Services
Authority, and is
entered on the FSA register (www.fsa.gov.uk/register/) under reference 422317.
We search all the leading insurers , including Legal & General, Norwich Union, Standard Life, Prudential, AXA, Friends Provident, BUPA, Bright Grey, Scottish Equitable, Scottish Provident , Scottish Widows, Skandia, Liverpool Victoria and Royal Liver. The guidance and/or advice contained within this website is
subject to the
UK regulatory regime and therefore restricted to consumers based in the UK.
We are independent brokers, and arrange life insurance policies under 'direct offer' arrangements. This means cover is arranged on the basis that we have not given you financial advice and you have not sought advice from us. We can answer your queries and speak generically about the policies we offer but cannot say 'which is best for you'. Instead we offer high levels of discount and you can generally arrange your plan through us at a much lower premium than if you had sought individual advice.
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Life Insurance Guide
Do you need life insurance ?
Basically, if you have dependents or a mortgage then YES.
Consider what would happen if you die today. Would your family be able to cope financially if you have insufficient life insurance or no cover at all? Just spend a few moments thinking about the income your family will lose if you die, and the amount they will receive if you die from any existing cover.
The only people who don't need cover are those with no dependants at all. However some mortgage lenders will insist that you take insurance even if you have no dependants.
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How much cover do I need?
A good rule of thumb is to take life insurance for 20 x your annual net income plus the amount of any mortgages or loans. This will mean that on your death any debts can be cleared, and the residual lump sum can be invested producing a regular income that will replace the income you were bringing in to the household.
If you can't afford to pay for the amount of cover you should ideally have then set a budget and ask us how much life insurance that will buy.
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What term should I select for my insurance ?
To answer this question you simply need to ask yourself why you are taking the cover in the first place.
If you are protecting a mortgage loan, it would be sensible to choose the same term for your life insurance as your mortgage.
If you have children, then consider taking life insurance until your youngest child will reach an age where you would expect them to be financially independent. Alternatively, if your spouse would suffer financially, you must consider having life insurance until retirement age.
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What is life insurance ?
You may also see life insurance referred to as 'term insurance', 'life cover' or 'life assurance' - all these terms mean the same thing. Life insurance is financial protection for your dependants in the event of your untimely death.
You pay premiums to the life insurance company in return for being covered for the 'sum assured', which is the amount that will be paid out on death.
The cost of cover will vary depending on the size of the 'sum assured', your age, occupation, gender, whether you smoke and the term of the policy. The application form will also ask you certain medical questions. Pre existing medical conditions can also affect the price you pay for insurance.
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How to save money on life insurance
You can save money be shopping around for cover. Our website is ideal because we access discounted rates from all the major insurers - saving you from the task of visiting many different sites.
The other way to save money is to stop smoking. Non-smoker premiums are significantly lower. Please note that you must have not used any tobacco product (including patches) for at least 12 months to be classified as a non-smoker.
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Do I pay tax on the payout from a life policy?
The payout from a policy is tax free, however, the money could then form part of your estate and be assessed for inheritance tax. This could account for 40% of your payout unless you are careful.
The easiest solution is to write your life insurance into trust. This means any payouts are made directly to your chosen beneficiaries, avoiding your estate and the Inland Revenue!
Please ask us when arranging your policy, as we can easily help you get your plan in trust.
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Further guidance is available on our full help page.
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