A guide to life insurance
Listed below is a helpful guide to some of the terminology that you will encounter. You should read this prior to selecting a policy from the menu above.
What is life assurance
What is critical illness protection
What is income protection
What is mortgage payment protection
What is private medical insurance
What is wedding insurance
Life assurance provides a cash benefit to your family if you die while the policy is in force. It is a way of providing protection for, amongst other things, loans, mortgages and your dependants. You can apply for life assurance for yourself or for joint cover. If you choose joint cover the policy only pays out once, on the first occurrence of death or terminal illness.
Depending on what type of plan you opt for, the benefit can be taken as either a cash lump sum, a regular income, or a combination of both and can be used for any purpose.
To determine the amount of lump sum your dependants would need in the event of your death you should calculate the total amount of the following:
- Your income multiplied by a number of years (an average number of years is 5 but this is dependent on your individual circumstances eg, children's ages)
- Outstanding mortgage amount
- Outstanding loans amount
- Funeral expenses
- Education for your children
- Other (eg. wedding costs)
Life assurance usually cannot be cashed-in although there are certain policies which allow you to do so if you wish to have a smaller lump sum paid in the event of your death.
This type of cover provides a lump sum payable on the diagnosis of certain major illnesses. There is no benefit payable in the event of death, however it can be built into a life assurance policy.
This is an ideal method of providing a capital sum at a difficult time for you and your family or business.
Income protection insurance is to cover your lost income due to disability or unemployment resulting in being unable to work.
Mortgage payment protection insurance is designed to help you to protect your mortgage payments and insurance premiums for up to 12 months if you become unemployed or suffer a disability (accident or sickness).
This cover provides private healthcare, which is primarily designed to pay for the treatment of medical conditions, including surgery, from which the patient should make a full recovery. The cover allows you to select different levels of benefit using different hospitals. It can therefore be tailor-made to suit your budget.
Wedding insurance provides a back-up should the whole thing be called off. Should you become ill, have an accident or death in the family the insurers will pay for the money you have lost in deposits and other expenses. Should anything be damaged or stolen on the day, such as the presents or spilled wine on the wedding dress, damage to hired vehicles or someone suffering a personal injury you will be able to claim compensation.
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