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Have you got the right life insurance? By Emma-Lou Montgomery
Review your policy regularly A recent survey shows that a third of us haven't reviewed our policies over the past five years - yet changes in our personal circumstances, our health and our financial matters all make a review Think twice about a joint life insurance policy Joint life policies usually pay out on the death of the first policyholder, leaving the second person uninsured at an age when the premiums shoot up in price. Overall it will be dearer, but it's worth opening separate policies at the start. Consider buying critical illness cover Think about taking out a plan that pays out if you survive serious illness. Buying two separate policies means if you claim for a critical illness, you still have life cover in place. It's cheaper to combine the two and have a plan that pays out if you either suffer a critical illness or die, which is useful for covering a mortgage. Don't get blinded by tax relief incentives If you have a personal pension it might look attractive to buy your term insurance at the same time, and benefit from tax relief in the same way your pension premiums do. But check this is the best option first, because it can sometimes be more expensive than buying the equivalent cover direct from an insurer. Always write your policy 'in trust' It is important to write your insurance policy in trust. This way, when you die the money goes straight to the person(s) you name as beneficiary, saving the 40% tax that could be liable if the sum is passed to your estate and subject to inheritance tax. Your insurer should be able to provide the necessary paperwork free of charge. Speak to a specialist adviser for peace of mind Not only must you make sure you pay the right price, you need to ensure you buy the right level of cover and the most relevant product. So to guarantee you have the right protection for your family it's worth either speaking to an IFA or consulting brokers such as Lifesearch or Torquil Clark Life Insurance.
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