Taxes are everywhere and seemingly unavoidable. There’s income tax, VAT, capital gains tax, counciltax, inheritance tax, corporation tax and National Insurance – and more.

Taxation is a part of everyday life. Depending on your salary, your earnings can be taxed at 20%, 40% or even 50% – and that’s before you add in National Insurance, which has a top rate of 12.8%. If you buy a bar of chocolate, a DVD or a pair of trainers, the price will include VAT at 20%. And on savings taxpayers suffer tax of at least 20% on any interest they earn from a, non-ISA building society or bank account.

Sometimes we have to pay more than one tax on the same item. A new car can attract a first year ‘showroom tax’ as well as VAT. The price of petrol includes both fuel duty and VAT. The cost of a pint of beer or a glass of wine will include hits for alcohol duty and VAT. And, of course, most of us will pay for goods like these from our hard-earned income on which we’ve already paid both income tax and National Insurance.

However, not everything is taxed and some goods and services have special exemptions from tax. Certain foods, children’s clothes, cycle helmets and books are a few of the goods that are free from VAT. There’s no income tax or capital gains tax on any income or growth within Individual Savings Accounts (ISAs). And certain types of gift are also exempt from inheritance tax.

It’s also good to know that premiums for a life cover policy are also tax-free. There’s no Insurance Premium Tax or VAT to pay. In addition, if a life cover policy pays out, the lump sum payment would also be tax-free (unless the original owner had sold the policy to somebody else).

Life cover is a type of life insurance that pays out a cash lump sum on death or the diagnosis of a terminal illness (that is an incurable illness that is expected to cause death within 12 months). You can buy life cover for one person or a couple jointly. The lump sum payable can either be a fixed sum that doesn’t vary, or an amount which decreases gradually throughout the term of the life cover policy. Decreasing cover is cheaper and is often bought as cover for a repayment mortgage.

Life cover is often surprisingly affordable. It can be easy to apply for too. Many providers offer online quotes to find the likely cost for a particular policy and also allow people to make their application for life cover over the phone. The provider’s highly-trained staff will ensure that all the necessary application questions are answered and they can also deal with any concerns or queries.

Many people with families, dependants and/or financial responsibilities have a genuine need for life cover. Life cover is the perfect means of ensuring that significant funds are made available should the worst happen. Without this cover, many people would struggle financially following the loss of a loved one.

All tax rates are correct for the tax year 2011/12.

Company Profile:

John Lewis Insurance offers a range of insurance services selected by the John Lewis Partnership. These include car, home, pet, travel, wedding, event and life insurance products.

For more information about John Lewis Life Insurance please visit the website here: www.johnlewis-insurance.com/homepage/life-cover.html.