What is Life Assurance
Life assurance can offer protection for you and your family in the event of your death or should you have an accident or illness. This can give you some peace of mind, knowing that your family will receive a financial payment should the worst happen.
This is the simplest form of life assurance. A term assurance policy is taken out for a set period of time (e.g. 10, 20 or 25 years) and guarantees to pay out a specified sum if you die during that period of time. There may be options to have the specified sum increase in line with inflation or have a joint policy with your spouse, however your should note that this will impact on the level of the premium. There is no investment element to this type of policy so if you survive the term of the policy, there is no payment or refund.
Whole of Life Assurance
As with the term assurance policy, whole of life assurance is a protection product which promises to pay out an agreed sum on your death. However in this case, there is no time limit on the term of the policy. Once the policy is taken out, the policy can continue uninterrupted for the rest of your life, as long as the premiums continue to be paid.
Specified Illness/Critical illness cover
Critical or serious illness cover is designed to pay a lump sum on diagnosis of a specified illness. Typical illnesses covered include cancer, strokes, heart attacks, multiple sclerosis and kidney failure.
Income Protection Insurance
Also known as Permanent Health Insurance, this protection policy provides an income (typically a percentage of your current earnings), if you are unable to work because of sickness or disability. Policies contain what is known as a 'deferral period' i.e. you must be off work 13, 26 or in some cases 52 weeks before the payments commence. This type of insurance is available as an individual policy or as part of a group scheme provided by an employer.
The cost of the protection policy will depend on many factors, such as age, health, smoker status, occupation, hazardous pursuits etc. Insurers are required to disclose how your personal information will be used and stored before you apply.
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