There are many important types of insurance cover that you should consider investing in, depending on your personal circumstances. Amongst these, life insurance is ne of the most unusual in that it is an insurance policy which the policyholder him or herself, will never reap the benefits of. However, if you have a family who are dependent on your income for financial support, it is absolutely essential that you think seriously about securing the appropriate life insurance cover. No one wants to consider the prospect of serious illness or death, especially if they have a family, but should the worst happen to you, it is preferable that your family are not left in financial – as well as emotional – distress.
As the name suggests life insurance policies are ones which pay out in the event of you losing your life, but there are a number of different types of policy that come under the umbrella term ‘life insurance’ and it is important to secure the one that fits your needs. The types of life insurance policy available include: term life insurance, which pays out to your dependents if you die within the fixed period agreed in the terms of the policy – usually around 18-20 years; whole of life insurance, which guarantees a lump sum payout to the next of kin when the policyholder dies, regardless of when this happens; decreasing term insurance, which is usually taken out to ensure that mortgage payments are covered in the wake of death. The payout with this type of policy decreases over time, just as the mortgage itself will; and critical illness cover, which pays out in the event of the policyholder being diagnosed with a life-threatening illness.
The type of policy you should choose will depend entirely on your individual situation and you should make enquiries with different providers before deciding on the right policy type. You may wish to take out more than one policy, combining say a whole of life policy and a decreasing term one, if you have both a family and a mortgage. In terms of cost, again this varies between different providers, but rates amongst the top companies are competitive. Many of these companies offer a quotation via the company website – for example www.endsleigh.co.uk.
Source:
www.moneynet.co.uk/Product-Guides/Life-Insurance/life-assurance-policy-types/37