The Life Insurance protection gap
Life Insurance policy holders have been told of the "protection gap" that is currently appearing and the need to regularly update and review life insurance requirements.
Kelly Ostler-Coyle, spokeswoman for the Association of British Insurers, has recently pointed out that there is
gap because of the contrasts of what people think they are being covered for and what is actually on the insurance document.
"Obviously it's worth updating life insurance and thinking every couple of years about your financial needs, what you're actually covered for and what you expect if anything was to happens to you," she explained.
David Yates of life insurance experts Contact Insurance stated "We know this to be true. If we could change one law it would be to make life insurance compulsory. It would be better still if such life insurance policies were to to have built-in checks to keep families covered in the event that the worst does happen".
Ms Ostler-Coyle went on to note people start thinking about life insurance when they hit key parts of their lives. These include starting a family, getting married and buying a first home.
David Yates of Contact Insurance added "Those with Life insurance might be interested to know that if a trust is placed on the life insurance policy, it will avoid the ravages of death duty. And those, for whom the payout was inteded, will not find a large chunk of it removed by the tax man".
These points come soon after Nationwide found that 47 per cent of parents in the UK have not opted for life insurance cover, which could leave them at risk if things take a turn for the worst.
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