Life Insurance cover provides either a lump sum or an income on the untimely death of an individual. Therefore, anyone who’s death would create a financial loss to another has a need for life insurance cover. This could/should include the following: -.
Parties to a Mortgage or indeed a loan (mortgage life insurance cover) .
Anyone with dependents (whilst a parent may not work, surely there would be a financial loss if anything were to happen whilst there are young children to be cared for) .
Key Individuals. Where a business would suffer financial loss on the death of an essential employee.
In essence any situation where monetary loss would be incurred could possibly have a need for life insurance cover.
630,000 people in the UK will die this year* *source:National Statistics, Winter 2002 .
Types of Cover.
Term Life Insurance .
Term life insurance is as it suggests taken out for a specified number of years at outset. With this type of policy you are merely paying for the cover provided based on your age, health and the term. For the coverage offered, it is crucial to get the most affordable term life insurance quote. It is possible to take out term life insurance that will pay level lump sums, decreasing lump sums (mortgage life insurance cover) or regular payments (income).
Whole of Life.
As the name suggests, potentially, this type of policy will provide cover through an individuals life time. However, when obtaining a whole of life insurance quote, as well as level of premium there are other aspects to be considered, such as investment performance, effect of charges, financial strength of the company.
Who is it?
Both types of policy have strong justifications. The following, we believe, could be the primary factors to take into account:.
Cost – Whole of Life insurance is, generally speaking, the more expensive product category.
Coverage period – If cover is needed for a specific time frame, i. E. A mortgage followed by term insurance might be more appropriate.
Future Plans – If, for instance a family is planned, then whole of life can offer the flexibility to increase cover for this or other like events.
Note.
We strongly advise that you view the CI Factsheet because Critical Illness (CI) now offers an equally significant benefit.
Conclusion.
This article is only intended to serve as a general overview of the requirements for and available approaches to life insurance. It in no way serves as a comprehensive outline of anyone’s unique requirements. It would be, therefore, wise to use this as a guide and seek more comprehensive advice, via a professional Independent Financial Adviser. All advisers are Regulated and Authorised by the Financial Services Authority (FSA) and are now required to explain their status to you (either independent and fee charging, independent but paid by commission only, or tied).
