Life insurance is a way of protecting those that depend on you, such as a spouse, partner, children or anyone else you choose, in the event of your death. It is also known as life cover, and there are various options.
There is also life and critical illness cover which will pay out in the event of death or critical illness, as specified in the policy.
The cover, the terms of paying out, and the length of the policy are all options that will affect the premium, which is usually paid monthly.
Life Insurance is an important cover for those that depend on you in the event of your unforeseen death. Those that rely on you financially, such as your spouse, children or relatives would be looked after if some accident or medical condition were to remove you from their lives. Their future could be assured by a life insurance policy.
Life insurance could be used by your dependents to repay a mortgage, provide an income, support children and their education, and to ensure they can live financially even if you are not there. You can support them even in the event of your death. You can protect them from financial crisis should the worse happen.
Choosing the right life insurance policy is important, both to provide the best cover for your family and dependents, and to ensure it is the most cost-effective given the high commissions that can be incurred.
There are various types of life insurance:
- Level term life insurance
- Mortgage decreasing term insurance
- Whole of life insurance
- Life insurance investment
You can go direct to life insurance companies, use a comparison site, buy through a discount broker, or use an advisory broker. IFA's (independent financial advisers) will also help you get the best life insurance policy.
A whole life policy, or whole of life insurance covers the individuals whole life as long as premiums are paid.
The premiums for a whole life policy tend to be higher than fixed term policies as the insurer will have to pay out as long as the contract remains.
Term life insurance provides cover for a fixed length of time for a fixed monthly premium.
The most common form of term life insurance is a guaranteed set premium over a given period of years. Usually the terms will be 10, 15, 20, or 30 years. The premium is calculated for the term and remains the same each month.
Level term policies may be able to be converted to whole life policies.
Quotes for life insurance policies can be obtained from high street brokers, comparison websites, and direct from insurers online.
It may be advantageous to obtain some advice first from an IFA or broker about the best cover for your circumstances and the various options available. Speaking to a number of different insurance companies will help to get information about what's available, terms, cover and payments.