Learn about Life Insurance

'I love being a parent. I love taking care of the kids, making them safe – well everything about it really. And I don’t want to think about a time when I can’t. I know I need to get some life cover, there’s also the worry if I can’t work or I’m ill. I just need someone to sort it out for me. Help!’

We know it’s not an easy subject to talk about. After all, life is for living, isn’t it? Why worry about what’s around the corner? Well the simple truth is we all do. And making sure you’ve got the right kind of protection, should the unexpected happen, will give you the peace of mind you’re looking for.

It needn’t cost a fortune and it’s easy to arrange.

In a nutshell, the main types of life insurance are:

Term assurance (referred to as ‘protection only’)
Term life assurance pays out if you die within a pre-determined period of time (the 'term'). However, If you survive the term, it pays out nothing. Term assurance is often the cheapest way to buy the level of cover you need to protect your family, or other dependants in case you die. Term assurance isn’t an investment, so it doesn’t build up a cash value.

Investment-type.
As well as paying out on death, ‘investment-type’ policies should build up an investment value, which can be cashed in during your lifetime. Examples of these policies include:

• Whole of Life – this guarantees a lump sum payout when the policyholder dies, whenever this may be. As long as the policy premiums are maintained, the life cover is guaranteed.
• Endowment – these policies are essentially a savings scheme, with life assurance attached.

A common example is an endowment policy used in association with a mortgage. At the end of the policy term, the policy pays out any accumulated returns or if the policyholder dies before the term has ended, there would be a lump sum payout plus any accumulated returns up until the death.

Life insurance policies typically cover the following:

• Death of the life assured.
• Terminal illness affecting the life assured.
• Critical illness affecting the life assured.
• Ill health or injury of the life assured.

Life insurance policies tend to have a variety of common exclusions - such as pre-existing medical conditions, age restrictions, occupational or dangerous pastimes, certain illnesses and diseases, and unusually large sums assured.

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