Life Assurance

Life Term Assurance

Life Term Assurance is designed to provide cash either by lump sum or regular payments in the event of death of the life assured during a specified period of time.

Life Term Assurance policies have no surrender value at any time. If no claim is made the policy will cease at the end of the term without value. The cost of this type of life insurance is lower than 'whole of life' policies for a given amount of cover. Term Assurance will be for a set term, at the end of which the family will be self-sufficient and not reliant on the person originally insured.

Additional benefits can be included such as critical illness cover and waiver of premium.

There are essentially 3 types:.

Level Term Assurance

This is where the amount of life insurance, or sum assured, remains level throughout the term of the policy. If you are taking out life insurance to protect your loved ones in the event of your death you will need to consider level term assurance to ensure that the level of protection remains constant. You will also need level term assurance if you have taken out an interest-only mortgage.

Decreasing Term Assurance

This type of life insurance is specifically designed to protect a capital repayment mortgage in the event of death and is often known as mortgage protection insurance. The sum assured decreases over the term of the policy roughly in line with your outstanding mortgage debt, although the premium will be determined at the outset and will normally remain the same throughout. Decreasing Term Assurance is usually cheaper than Level Term Assurance and with some insurers you will be able to select the interest rate on which the reducing cover will be based.

Occasionally if you have assigned your policy to a lender, conditions may not automatically allow you to benefit personally but may insist that the sum assured repay the debt.

The premium can be reviewable or guaranteed.

Family Income Benefit

This type of life insurance allows the benefits to be paid as a regular monthly income rather than a lump sum.

When someone takes out life cover to protect their family they do it on the basis that should they die they want their family to have enough money to continue to live in the style they are accustomed to. Many people take out life insurance to protect their mortgage or to provide a cash lump sum, however, what is often forgotten is that there are still ongoing daily expenses. Family Income Benefit is used to provide the financial security to cover these commitments.

It is available as death benefit only or with critical illness insurance included and can be written as a joint or single-life policy as required.

An income will be provided on death for the remaining term of the plan and as an additional benefit you can add indexation which means that the level of cover would keep pace with inflation.

As with Decreasing and Level Term Assurance you can add waiver of premium benefit to the plan to ensure your premiums are paid in the event of long term illness.





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