Who needs supplemental life insurance?
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Written on: 30.10.2009 [12:03]
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Sebastian
Sebastian
 MONETOS Experte:
Topic creator
Posts: 1
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I have a spouse, three children and four grandchildren. My current life insurance policy will pay out 150,000 when I die, which I always thought was enough, but my friend recently told me she is considering supplemental life insurance to ensure all her family members benefit from the payout: she has only two children and one grandchild. What is supplemental life insurance and do I need it? |
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Written on: 02.11.2009 [16:24]
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Madasharyan
Madasharyan
Posts: 2
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As the name suggests, supplemental, or supplementary, life insurance is essentially an additional policy you can purchase to extend the life insurance cover you already have. You may wish to extend your original cover if you have children and had previously only purchased cover to assist your spouse in the event of your death. As your friend suggests, one reason why many people purchase supplementary life insurance is to ensure that when the lump sum is shared out on death (if indeed it is your intention for it to be shared out) every family member can benefit. If your 150,000 were to be shared out equally, each family member would receive more than 18,000. Alternatively, you may wish for your spouse to receive 50,000, and each of your children to receive 25,000. This would leave each of your grandchildren with around 6,000. If you only wish to leave your family with a windfall, this may well be enough. If you plan to provide for their futures, you may wish to purchase more cover. Beware of comparing your own situation with your friend's: she may have purchased significantly less cover, or be aware that her children are relying on her life insurance payout to clear their debts. You only need to assess whether your current life insurance cover is sufficient to provide your family with enough security to cope when you die. |
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Written on: 11.11.2009 [15:46]
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Mia
Mia
Posts: 3
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Does your husband/wife also have life insurance? Don’t forget that if you are worried about the amount that your kids and grandkids will receive you need to factor in their life insurance too. I mean if yours is equally divided and then another £150000 comes from your partner they will receive a lot more. But it depends on how much you need to support them. Was it just to help them with the future or to actually live off? |
