Life Insurance - what is it?

Life insurance, or life cover, as it is also known is available in two different forms, from Life Assurance companies. Term Assurance policies pay a tax free lump sum should you die at any time during a fixed policy term. The second type which provides cover for the rest of your life, is known as Whole of Life insurance.

Life insurance - what it could do for you

What life insurance could do for you depends largely on the financial arrangements you make for your dependents. For example, your partner could use the lump sum to pay off a debt such as a mortgage or use the money to provide an income.

Alternatively, you could take out a separate mortgage protection policy, so the Life insurance money can be spent elsewhere. If you need to ensure that your dependents have an income in the event of your death, you can arrange this as a separate income protection or Permanent Health insurance policy. Likewise, you can take Critical Illness Insurance cover as an additional benefit.

Life insurance - how it works

If you choose a Term Life Insurance policy you'll receive a lump sum if you die during the period covered by the policy. If you choose a Whole of Life insurance policy, you'll receive a series of payments. Both are usually tax free and you can spend the money from your life insurance payout however you choose. You can either pay premiums each month or, if you prefer annually in advance. The premiums will vary according to how long you want life insurance cover for and other factors such as your age, occupation and medical history.

For further information on Life Insurance

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