Life Assurance Options

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 to provide for their families and alleviate any financial worries at a difficult time.

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 lapses. The benefit is paid tax free and premiums are usually monthly, and fixed throughout the term. Because the term and benefit are known from outset, and there is not investment content, term assurance is a very cost-effective method of protection.

Decreasing Term Assurance works exactly as above, but the benefit is set at outset and gradually decreases over the term of the policy. These policies can be used as cover for a repayment mortgage, or other loan where the amount of capital outstanding also decreases over time. Because the benefit reduces over time, the premiums are kept very low.

Family Income Benefit works the same as term assurance but instead of paying a lump sum upon death, it will pay a regular monthly tax free income in the event of death to your dependants up until the end of the term of the policy.

Critical Illness is usually available as an addition to all term assurance plans but can be bought on a stand alone basis. Critical illness generally allows for the lump sum benefit to be paid also in the event of diagnosis and survival of certain critical illnesses, such as Heart Attack, Cancer, Stroke, Transplant, 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. Critical Illness can be provided on either a guaranteed or reviewable premium basis.

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