protection services
Life Protection Options
There are several ways in which to protect yourself and your family in the event of an untimely death. Most people take out life insurance to provide for their families and alleviate any financial worries at a difficult time.
Term Assurance
pays a lump sum in the event of death during the term of the policy. There is no investment element within a term assurance contract so at the end of the term there is no maturity value and life cover lapses. The benefit is paid tax free and premiums are usually monthly, and fixed throughout the term. Because the term and benefit are known from the outset, and there is not investment content, term assurance is a very cost-effective method of protection.Decreasing Term Assurance
works exactly as above, but the benefit is set at outset and gradually decreases over the term of the policy. These policies can be used a cover for a repayment mortgage, or other loan where the amount of capital outstanding also decreases over time. Because the benefit reduces over time, the premiums are kept very low.Family Income Benefit
works the same as term assurance but instead of paying a lump sum upon death, it will pay a regular monthly tax free income in the event of death to your dependants up until the end of the term of the policy.Critical Illness
is usually available as an addition to all term assurance plans but can be bought on a stand alone basis. Critical illness generally allows for the lump sum benefit to be paid also in the event of diagnosis of certain critical illnesses, such as Heart Attack, Stroke, Transplant, Blindness, Total & Permanent Disability and so on. Most providers conform to the Association of British Insurers standards for qualifying illnesses and it is important that you fully understand the terms of each illness. Critical Illness can be provided on either a guaranteed or reviewable premium basis.Permanent Health Insurance
This policy is designed to provide a tax free income in the event the insured individual is unable to work due to ill health. The level of premium will depend upon benefit and term selected and most policies cease to pay the benefit once the insured is able to return to work. PHI policies are usually written to age 65.
Accident, Sickness & Unemployment
ASU policies were traditionally sold to accompany mortgages, allowing for a regular income to be paid to the insured should they be unable to work (or lose their job). The product can be split down, and unemployment cover is usually the optional extra available for an additional premium. It is important to compare ASU and PHI closely as one may be more suitable than another.
