Earlier we referred to the adage that life insurance is never bought but always sold. The chances are that if you have come across life insurance in anything other than circulars and newspaper advertisements, it will have been through a call from a salesman employed either by a life insurance company or by an insurance broker. Some recent surveys have suggested that more than half the people who have investment-oriented policies including little life cover believed they had bought protection for their families.
People often succumb to the apparent moral force of the salesman's message, which is founded on the premise that life insurance is a Good Thing to have. Eloquently extolling the virtues of keeping the widow from the poorhouse and the children out of rags, the unscrupulous salesman may succeed in selling a package which includes minimal protection and an unwanted (or unneeded, or both) investment-oriented policy.
Life insurance can make a positive contribution to the quality of life to the extent that it reduces the risk of hardship (and the anxiety associated with this possibility) and increases the possibility of independence. If it is genuinely to make such a contribution, the would-be purchaser must know something about it. That is the aim of this website - to explain sufficient, not to make you an expert, but to help you decide what you want or need from life insurance so that you can satisfy such need at the best possible rate.
An important factor to bear in mind when considering the cost of life insurance is tax relief. Since 1853 successive Governments have recognised the value of life insurance to individuals and the economy and have allowed two major concessions, which will be dealt with here since they affect life policies of every type.
The first is that each premium paid on a "qualifying" policy attracts tax relief. The method of granting this relief has been changed with effect from April 2014. Formerly the policyholder had to claim the relief from the tax authorities. From 2014 the policyholder pays... see: Tax Relief