There are several ways in which to protect yourself and your family in the event of an untimely death. Most people take out life insurance (also known as life assurance, life protection or life cover) to provide for their families and alleviate any financial worries at a difficult time.
Level Term Assurance pays a lump sum in the event of death during the term of the policy. There is no investment element within a term assurance contract so at the end of the term there is no maturity value and life cover ends. The benefit is paid tax free and premiums are usually monthly, and fixed throughout the term. Because the term and benefit are known from the outset, and there is not investment content, term assurance is a cost-effective method of protection.
Decreasing Term Assurance works similarly to Level Term Assurance, but the benefit is set at the outset and gradually decreases over the term of the policy. These policies can be used as cover for a repayment mortgage, or other loans, where the amount of capital outstanding also decreases over time. Because the benefit reduces over time, the premiums are usually lower than for Level Term Assurance.
Family Income Benefit is similar to term assurance but instead of paying a lump sum upon death, it will usually pay a regular monthly tax free income to your dependants up until the end of the term of the policy.
Critical Illness Cover is usually available as an addition to all term assurance plans but can be arranged on a standalone basis. Critical Illness generally allows for the lump sum benefit to be paid in the event of diagnosis of certain critical illnesses, such as Heart Attack, Stroke, Cancer, Blindness, Total & Permanent Disability and so on. Most providers conform to the Association of British Insurers' standards for qualifying illnesses and it is important that you fully understand the terms of each illness. The illnesses covered will be specified in the policy along with any exclusions and limitations - these differ between insurers. Critical Illness can be provided on either a guaranteed or reviewable premium basis.
Please contact us if you wish to discuss your life protection requirements.