The financial security of your family or business needs careful planning and regular reviews. Planning your family's financial future aims to ensure that sufficient funds will be made available should the unexpected such as job loss, illness or disability occur.
In the event of your untimely death, the funds made available may help to ensure that your dependants are able to carry on with the lifestyle you would have wanted for them by repaying your debts, securing the family home, and providing the necessary capital.
Term Assurance
Term assurance provides cover for a fixed term with the sum assured payable only on death. There are no investment benefits or payments on survival.
Types of Term Assurance
Term Assurance policies can be written on a single life, joint life (first or second death). This can also be provided for business cover, for both keyman and share protection policies.
Level Term Assurance
With Level Term Assurance premiums are fixed for the duration of the insurance term. A Level Term Assurance policy is taken out for a fixed term. This type of term assurance policy can be a useful for providing security for dependents up to a certain age.
Decreasing Term Assurance
With Decreasing Term Assurance, life cover decreases during the insurance term reducing the cash payout the longer the term runs. Decreasing term assurance can be useful for those wishing to secure the payment of a reducing debt (eg a repayment mortgage) if they die during the term. This type of term assurance is less expensive than level term assurance.
Whole of Life Assurance
Whole of Life Assurance policies give you protection for life. Unlike Term Assurance that only pays out if you die during the term of the policy, a Whole of Life Assurance policy always pays out eventually.
For this reason Whole of Life Assurance can be more expensive than Term Assurance, although this is not always the case.
Types of Whole of Life Assurance
Product types available are: with profits whole of life; unit linked whole of life; low cost whole of life; universal whole of life and non-profit whole of life.
Critical Illness Insurance
A Critical Illness policy is designed to cover you in the event of a pre-determined illness or disease. Not all Critical Illness policies are the same and policy conditions will vary. These can be set up on either a term or whole of life basis.
With most Critical Illness policies a capital sum is paid out on diagnosis of a specified medical condition or occurrence of some forms of heart attack, some forms of cancer, renal failure, major organ transplant, stroke etc.
Income Protection Insurance
Income Protection policies provide an income that starts after a deferred period if you are unable to work through sickness or injury. These policies usually have a fixed term to retirement age 60 or 65.
Once the Income Protection policy is accepted by the insurer the premiums cannot be increased or claims refused regardless of the number of claims.
There is a maximum insured income limit. Levels of Income Protection cover may vary but may be in the region of 50%-65% of previous income.
Income Protection Insurance premiums
Income Protection premium rates are based on occupation, age, health, level of cover, term, deferred period, sex and smoking status.
The value of investments and income from them can fall as well as rise and you may not receive the full amount invested.
Insurance which is based on an assessment of the health of the applicant is unlikely to cover the applicant for previous or existing medical
conditions and that the customer should refer to policy documentation and seek advice in order to understand what the policy does and
does not cover before making an application.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.