Anyone looking to protect their family and wealth should look closely at how they can put in place life assurance to ensure money is paid to beneficiaries on their death. Life assurance costs are normally fairly modest and arranging a life policy is relatively easy. There are two areas of life assurance planning which are particularly linked to family protection: providing some income and paying off debts and perhaps inheritance tax (IHT).
Many families nowadays have high debts, many of the same families afford the cost of debt through one wage earner. If that wage earner dies and their income ceases, the loans/debts can become devastating to the family that remain. Putting in place life assurance to provide income and paying off debts is a sound position, creating a lump sum may well be critical to keep a decent level of income available for the family
It is worth bearing in mind that it is possible that inheritance tax (IHT) can be alleviated through the use of trusts. However, life assurance can be used as an alternative to pay the expected IHT bill.
Separate to life cover, one may also consider critical illness cover as a valuable part of wealth protection.