Joint Life Assurance

It is common practice for a married couple to take out life assurance on each life. Often they choose an endowment policy on the life of the husband and a (much cheaper) term policy on the life of the wife. The purpose in insuring the life of the wife, even though she may not necessarily be earning an income, is to give financial protection to the husband should he be faced with the problem of bringing up a family single-handed and of having to employ a housekeeper.

Consideration should be given in such circumstances to an alternative and usually very much more economical way of providing this protection with one insurance policy. This takes the form of a single policy on both lives jointly, the benefits to be payable on the death of the first of them or, if an endowment policy, at the end of the agreed period. The premium on joint life assurance is only slightly higher than on a single life.

Tax relief

Premiums payable on life policies for terms of not less than 10 years are allowable for tax relief at 17.5% (reduced to 15% as from April 2001). There are certain restrictions and conditions on this relief but these are of little consequence to the average United Kingdom resident of modest means. There is no need to make any claim for the tax relief as the amount you actually pay to the life office as premium is not the full amount but the net amount after tax relief.

Mortgage Protection

A particular form of term policy is one designed merely to pay off the outstanding debt on a repayment mortgage in the event of the death of the mortgagor. This is called a 'reducing term policy'. It costs in premium even less than ordinary level term because the insured amount falls in line with the reduction of the outstanding amount of the mortgage.

Endowment assurance

Endowment assurance, unlike simple term assurance, provides not only protection for your dependants in the event of your death during its term but also a profitable means of saving and investing for your own... see: Mortgage Protection

Personal And Business Finance 2018

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