Life Insurance

Life Insurance

Although money can’t replace a loved one, it can help those left behind to weather the financial storm. For example, it could pay off the mortgage or provide an income to help cover regular household expenditure.

Types of Insurance

There are different types of Life Insurance – the most appropriate type for you will depend on your circumstances. Life Insurance will pay out either a single lump sum (sum insured) or a regular income when you die.

 

Term Insurance

This is the simplest type of Life Insurance. You choose how long you’re covered for, eg. 20 years (the term), and the policy pays out If you die within the agreed term. You can also take out term cover as a couple, with the policy paying out on the first death only during the term. There are several different types of policy:

-Level: The amount of cover and premiums remain the same

-Increasing (or index-linked): The amount of cover and premiums gradually rise in line with inflation

-Decreasing: The amount of cover gradually reduces. Generally used to protect a repayment mortgage where the amount of the loan outstanding reduces each year.

-Renewable: You can extend the original term of the policy

-Convertible: Lets you convert the policy to Whole of Life Insurance

Family Income Benefit Insurance

This is similar as Term Insurance, but instead of paying a lump sum when you die, it will pay out a regular income instead. This type of payment may be more suitable where the main purpose of the policy is to provide ongoing financial support to dependants.

Whole of Life Insurance

Whole of Life Insurance pays out a lump sum when you die, whenever that is, as long as you are still paying the premiums.