Before purchasing Life Insurance cover, make sure you have a full understanding of exactly how your Insurance policy works.
Many people fail to take the time to understand their Life Insurance cover and as a result, spend years paying their Insurance premiums only for their family to find that they cannot claim on the policy.
To help you we have put together a brief guide to Life cover.
There are different types of Life cover available to you, here we discuss Term Life Insurance:
Term Life Insurance
This type of Insurance cover will pay out a one off lump sum in the event of the policy holder’s death. The amount paid out will depend on how much cover the policy holder took out and whether this cover remained level or decreased over time
Term Life Insurance cover runs for a specified amount of time known as the policy’s term.
If the policy holder does not die within the term of their policy no pay out will be made.
This type of Insurance cover can be level or decreasing.
Level Term Life Insurance cover will pay out the same amount at any point in the policy’s life. This is usually used for people who have interest only Mortgages, but can be used for any style of Mortgage.
Decreasing Term Life Insurance cover will pay out less as the policy gets older. This type of cover is designed to be used with repayment Mortgages.
However, you do not have to have a Mortgage in order to take out Life cover. Many people take out life cover just to provide some inheritance for their loved ones after their death
The majority of Term Life Insurance policies will offer Terminal Illness cover at no extra charge, but this will only pay out if the policy holder is diagnosed with an illness that they will die from. Beware, this is not the same as Critical Illness cover.
Most Term Life Insurance policies can be combined with Critical Illness cover so that the policy will pay out in the first event. In other words, the policy will pay out if the policy holder contracts one of the named illnesses or dies. Be aware that the policy will still only pay out once.
Now you know the basics you are in a much better position to find the right policy for you, but if you want some Insurance advice and you want to find an outstanding deal for your Life cover, speak to one of our Independent Financial Advisers.
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