Life Insurance

Life Insurance is a flexible way to provide protection for life's uncertainties.
 
A life insurance policy is an agreement between the provider of the insurance to pay a specific sum, known as the 'sum insured' in the event of death, or at the end of a set period of time, in return for a payment by the policy holder, the premium. The premium maybe a single, an annual or a monthly payment.
 
Although many insurance policies are increasingly compared by price. The price charged for an insurance policy including age, sex, occupation and any features that you choose to add to the policy. Initially you will be given an illustration to confirm how much the insurance company will charge based upon this initial information.
 
On application a life insurance company will ask various questions to decide what level of cover to provide, the terms & features that they are prepared to offer and the amount that they will charge. This may or may not alter the premium that you were intially quoted and can take into account your health.
 
The varying features and options available with life insurance policies can make Independent Advice invaluable. The policies range from those where the insurance stays at a level amount to policies that decrease, options that last for a short term to the whole of your life.
 
Life Insurance can also have other cover including Critical Illnesses, Total Permanent Disability, Mortgage Payment Protection and Waiver of Premium, to name but a few.
 
Should you require more information about the features offered within life insurance policies please contact us for further information. For more general information about the types of life insurance which may be available to you please scroll down.

Level Term Assurance
 
The simplest form of term assurance.
 
If the person who has been insured died during the term of the policy then the sum assured will be paid out. The sum assured does not change during the life of the policy and once the policy ends it will have no value.

Renewable Term Assurance
 
Some term assurances are 'renewable'. This means that when the policy reaches the end of the term that you selected initially, you are given the option to take out a further policy at the rates offered at the time but without the need to provide further evidence of your health.
 
At the end of the term should you wish to renew the policy your new rate would be based upon your age at that time. If you take this option, regardless of your health and life expectancy, the life office cannot decline to provide cover.

Convertible Term Assurance
 
A type of level term assurance which has an option to convert the policy, at any time during its existance, to a whole of life policy without the need for further evidence of health.
 
The premium at the time of conversion will usually be altered to one that of a whole of life policy for someone of that age when it is converted.
 
Premiums charged for convertible term assurance will be slightly higher than for ordinary term assurance. This is because you will pay an additional amount for the option to convert your policy to a whole of life plan which can be taken regardless of your health at the time that you chose to convert the policy.

Decreasing Term Assurance
 
A term assurance which reduces either yearly or monthly in line with a stated amount agreed at the beginning of the policy, reducing to nil by the end of the term.
 
The cover reduces but the premium paid remains the same for the life of the policy.
 
Due to the decreasing nature of the policy, the premium paid is normally cheaper than a level term assurance policy with the same starting sum assured and term. These types of policies are sometimes used to cover IHT liabilities on a potentially exempt transfer but more commonly to protect a mortgage

• Mortgage protection policy

  Decreasing term assurance specifically used to provide cover for a repayment mortgage.
   
  As the debt owed on the mortgage reduces, the sum assured reduces accordingly. Most policies are designed so that the sum assured will repay the debt in full provided that interest rates do not exceed a certain level during the life of the mortgage. This level is generally set at 10% but varies depending upon provider. It is normally the way of providing the lowest cost cover for a repayment mortgage.

Family Income Benefit
 
This is a life assurance which can be used to provide an income as an apose to a lump sum in the event of your death, or indeed a critical illness
 
The idea behind the plan being that your family will receive a lump sum annually or monthly so that they can continue with the standard of life that they had prior to your death/critical illness.
 
This sort of plan can either provide a level amount of benefit(the income would remain the same throughout the policy's term) or increasing, which can help to reduce the impact of inflation over time.
 

Whole of Life Policies
 
This policy, rather than being for a specific period of time, will pay out the sum assured on the death of an individual regardless of when this may be.
 
Because this type of policy will always have to pay out an amount on death (provided that premiums continue to be paid) it is normally more expensive than term assurance.