Given the uncertainty of the UK economy many people are looking to reduce their outgoings - just to be on the safe side - and insurances may look like an area where costs can be trimmed. However, if you are in that situation, think hard about the possible consequences before you act.
For example, giving up your life insurance policy and the potential financial security of your family just to save a few pounds each month could ultimately prove incredibly expensive for your nearest and dearest, should the worst happen. Additionally, foregoing premiums on cover such as contents insurance could also prove disastrous if you are subsequently burgled or lose your possessions in a domestic disaster, such as a fire.
There is a large proportion of people between the ages of 16 and 65 in paid employment in the UK and of these many are breadwinners for their families; either on their own or with the help of a partner.
However, unexpected deaths don’t only happen to those who had the foresight to arrange life insurance and so the loss of an income on top of grieving over a lost one would make it even harder to cope for those left behind. So, what may seem like a good way to save a little money by cancelling your
life insurance policy - or other policies for that matter - may ultimately prove catastrophic for your family.
Protecting your family and your assets applies equally in death as in life, so ensuring that the value of your estate is maximised is also important. If the value of your estate is quite high then you should also seek advice on how to minimise the risk of paying inheritance tax. Therefore, it is worth keeping in mind that there are many specialist tax advisers that can ensure that the minimum amount possible is paid as inheritance tax.
But, it is essential that you keep paying insurance premiums especially if they are linked to an endowment policy or similar financial instrument that will ultimately return your investment and/or perhaps pay off your mortgage. If you are thinking of ‘cashing in’ such policies, get advice first, as there may be alternatives that will not leave you - and more importantly your family - financially disadvantaged.
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Adam Singleton writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.
