Life Insurance

What is it?

Life Insurance provides a lump sum in the event of your death. There are two main types of life insurance: term and whole of life.

Term assurance, as the name suggests, last for a fixed period. The period can be from 1 to 40 years. It is pure insurance and has no cash value unless the person who is insured dies within the term of the policy.

Whole of life policies, have an investment element and so can build up a cash value. However, these plans are not designed for savings as the investment element is used to supplement the premiums paid by the policyholder in later years. This is because under this type of plan the cost of insurance within the plan rises. These plans last for the whole of the insured’s life or until the policy is cashed in.

How Can It Help Me?

Since life assurance is only paid in the event of death, there is no tangible benefit for the person insured. However, it does provide those they leave behind with greater financial security.

When Would I Use It?

Life insurance companies do not dictate what money from a life insurance plan must be spent on. Generally, it replaces the income a person would have used in repaying a mortgage, paying for living expenses of their family or school and university fees of children.

More sophisticated uses include buying out shareholdings of private companies and paying death duties.

What Else Should I know?

There are several different types of life assurance available within the market. It is important that the type you select is suitable for the purpose you wish to use it. If not, you may find you are paying significantly greater premiums than necessary for no additional benefit.

There are several important options which can be included within life assurance which you should consider before taking any policy forward. These include waiver of premium, terminal illness payment and total and permanent disability benefit.

You should speak to a qualified adviser before committing to this type of policy.

What Should I Do Next?

Please contact us for more information on rates and providers.

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