Life insurance

What is life insurance ?

Life cover is a type of insurance policy designed to financially protect your dependents/beneficiaries in the event of your death, providing them with financial stability and security. It can pay off debts or provide a lump sum to help with everyday expenses and future planning.

The death of a partner can cause significant financial, practical, and emotional strain; however, life cover can help protect you from this sudden tragedy. Even the most basic insurance policy to provide funds for your family in case one of you passes away eases some of that burden – giving peace of mind so that loved ones are not left without proper care.

Life Insurance

Covers you against: Death or terminal illness

Benefit paid: Lump sum

Life insurance provide a lump sum, paid tax free, to your dependents in the event of your death. Life insurance can also be known as term insurance and there are two main ways in which the cover can be arranged:

Level Term Assurance: this type of policy is where the amount of cover, which is also known as the ‘sum assured’, remains at the same level thorough the length of the policy. This type of policy is often taken out to help pay off a mortgage and is most suited to interest only mortgages, where the amount owed does not decrease over time.

Decreasing Term Assurance: again this policy pays out a cash lump sum in the event of death, but the amount of money paid out decreases over time. These policies are a good fit when taken out alongside a repayment mortgage so that the amount paid out is the same, or close to the amount left on the mortgage. As the amount of cover decreases over the length of the policy, the premiums are typically cheaper than they are for level term assurance.

Family Income Benefit life insurance

Covers you against: Death or critical or terminal illness

Type of benefit paid: Regular income

Family Income Benefit pays out in the event of death, but instead of a one-off lump sum of cash, it pays a regular, tax-free income until the end of the policy term. This can be a suitable option for people who would rather that their dependents receive a regular income, rather than a one-off lump sum.

Benefits can include: Hospitalisation benefit which pays out a lump sum payout if you are in hospital for a minimum of 28 consecutive days following an accident.