What is Life Insurance?
Life insurance is a type of cover which will help protect your loved ones financially if you were to die during the length of your policy. It is not a savings plan and cash would only be paid out once a claim is made. You choose the value of the cover and how long it is required and pay your premium monthly or annually. Upon death your family would receive a lump sum which could be used to repay your mortgage and help with other expenses such as, household bills and childcare costs.
Do I need life insurance?
If you are the main breadwinner in the family and your family would struggle financially if you died it is imperative to have life insurance. Also, anybody who has dependents needs to consider taking out life insurance. It would also be important to have life insurance if you have debts, loans or an outstanding mortgage.
What is critical illness?
Critical illness cover could pay out a cash lump sum if you are diagnosed with one of the specified critical illnesses such as cancer, stroke or heart attack. Each insurance company will have a specified list of the illnesses they cover.
Critical illness can be added for an additional cost when you take out life insurance.
Do I need critical illness cover?
Similar to the reasons you would take out life insurance if your partner and/or children rely on you financially its worth considering getting covered.
The lump sum could pay for your bills for the period you won’t be working. Also, it could help towards the costs of recovery such as domestic adjustments to your home.
Family Income Benefit
Family Income Benefit Family income benefit safeguards a level of income for a fixed term. In the unfortunate event of death the amount of income chosen at the start of the policy with be paid for the rest of your plan. Most plans are to protect you until your youngest child is 18 or 21.
Family income benefit differs from other types of insurance in that rather than pay a lump sum in the event of a death it will be paid as an income. This can be paid monthly, quarterly or annually and is currently tax free.
Long-term income protection
Long-term Income Protection, otherwise known as Permanent Health Insurance is designed to replace your gross monthly income until your normal retirement age should you be unable to work due to illness or injury. The policy would be tailored to start paying benefits at the point where your employer stops paying your sick pay.