Missing out on a trustThe Tax Man can claim up to 40% of your life insurance payout as inheritance tax. According to Money Observer, those with assets totalling 275,000 or more (including a house) are especially prone to tax inspection.

Only insuring the main earnerWhilst it is important to cover the main breadwinner, by neglecting to additionally insure the housewife or househusband may result in extra child care costs. Family income benefit (FIB) may be an appropriate policy to put in place.* Opting for a lump sum over incomeIf your dependents are likely to require an income, then buying a policy that pays out a lump sum is a mistake. Many people invest lump sums for an income, but when they invest it, they have to pay tax.

FIB, so ask an Independent Financial Advisor for recommendations.* Not proving full medical records or detailing comprehensive medical historyFailure to disclose a complete picture of your health, no matter how trivial, could invalidate a claim later on.There’s no excuse for not conducting your own homework, as there is an abundance of information available online. Sites such as moneynet, provide not only price comparison research on difference life insurance products, they also offer downloadable consumer product guides. Lowermybills proffers a similar service stateside.

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