Life Assurance

There are so many different varieties of insurances linked to the life of the policyholder and so many life insurance companies with similar offerings that expert advice can be valuable.

Life Insurance

Life Insurance can help protect you against the financial consequences of unexpected events. It is one of the oldest forms of insurance and now comes in a variety of forms. Term assurance pays a tax free lump sum in the event of death during a specified period in return for a fixed monthly, or annual, premium. at the end of the term the policy finishes and there is no maturity value. As a result this is the cheapest and simplest form of life cover available.

Most people need life insurance but it becomes vital when you have found your partner for life and have children. In the tragic event of a death, the remaining partner has to support the children and maintain payment of other overheads such as a mortgage but on a reduced income.

As with all insurance, the insured party transfers the risk to the insurer, receiving a policy and paying a premium in exchange. The risk assumed is the risk of death of the insured - a beneficiary receives the policy proceeds upon the death of the insured.

Level Term Assurance

Level term assurance or term life insurance is a form of life insurance that pays out if the policyholder dies or, with some plans, on the diagnosis of a terminal illness first identified during the term of the policy.

If the policyholder is still alive when the policy term expires, no payment will be made. If payment ceases at any stage during the term of the policy, it will lapse and thereafter have no value.

A critical illness option is available at extra cost where the sum assured becomes payable on the conclusive diagnosis of a critical illness. Details of conditions covered are set out in the individual provider's product literature, which can be viewed online.

Mortgage Protection - Decreasing Term Assurance

Mortgage protection is a form of life assurance designed to cover a capital and interest mortgage, payable in the event of premature death where the sum payable decreases in line with the reduction of mortgage debt.

Critical Illness

Critical Illness policies have become more popular as modern medicine has made it possible for people to survive conditions such as cancer or strokes, but not recover sufficiently for them to return to work.

These policies can be distinguished from private medical insurance plans which pay for treatment in the event of critical illness. A critical illness plan is an insurance policy that pays out a lump sum in the event that a critical illness is contracted such as cancer, heart attack, multiple sclerosis, or a stroke. Each policy will specify exactly the range of illnesses that are covered.

Waiver of premium can also be added to level term assurance, mortgage protection, or critical illness at an extra cost. This option will pay your premiums if you are unable to work for health reasons. All three plans can be taken out on either a single or joint life basis.

Whole of Life Policies

Whole of life policies provide for the payment of a lump sum on death at any time. How much that lump sum will be, depends on the type of policy. Should a non-profit policy be taken out the sum assured will be fixed at the same level throughout. There are two main types of Whole of Life policies which are:-

• 1. With profits policy: a with profits policy will increase the sum assured at regular intervals by a (non-guaranteed) bonus each year of the policy and by a terminal bonus at the end.
• 2. Unit Linked policy: a unit linked policy will link the value of the sum assured to the value of the investment.

If you require more information, contact us on 01483 212957