Life Insurance for Dentists

Life insurance is broadly about providing financial security for people who depend on you if you die.  It is usual business practice to cover mortgages, loans and other liabilities and other information that maybe requested by lenders.

There are two main types of life insurance: term insurance and whole-of-life insurance.

Term insurance

This is the simplest and cheapest type of life insurance, and is known as term insurance because you choose how long you're covered for, say, 10, 15, or 20 years (the term).

Term insurance only pays out if you die within the term you've agreed. If you live longer than the term, you get nothing. As a couple, you can also take out term cover in both your names, with the policy paying out if either of you die during the term.

Examples of the various policies available are:-

• family income benefit (a policy which pays out income rather than a lump sum usually to your selected retirement age),
• increasing policy (where cover and premium rise over the years),
• decreasing policy (where cover falls over the years but the premiums remain level),
• renewable policies (which let you extend the original term).

The policy can be set up under trust. This means that in the event of death, proceeds of the policy are paid directly to dependants of your choice. Provided a trust is set up correctly and depending on your circumstances, there may be benefits to doing this.

Whole-of-life insurance

Whole-of-life insurance pays out an agreed sum when you die, whenever that is.   Unlike term life insurance, which covers the contract holder until a specified age limit; providing premiums continue to be paid, a traditional whole life policy will cover you for life.  Upon the inevitable death of the contract holder, the insurance payout is made to the deceased's beneficiaries.  These policies may be subject to review, and as such there is a possibility that your premiums may increase or your cover decrease.   These types of policies can be used in the mitigation of inheritance tax, written on a joint life, second death basis and written in trust to the beneficiaries, therefore falling outside your estate.

What does it cost?

These policies will cost you more, partly because they will pay out whenever the event (death) happens, but also because of the various charges that come with them. The cost also depends on your lifestyle: if you're a smoker or have hazardous pastimes or hobbies, you'll pay more than a non-smoking office worker.   Always compare what's covered by a policy, not just the price. Some might be cheaper than others, but they may not offer the same level of protection.

If you would like further information about life insurance cover for dentists or would like to arrange a free no obligation meeting, please give us a call on 01489 890111.