The aim of life protection (or life assurance) cover is to protect you against the unexpected. It will provide money for people who financially depend on you. We need to consider the impact and consequences our death would have on the people most close to us.
Protect the things that are important: “Your family, your health and your lifestyle”
You only get a pay-out within the 'term' of your policy. The payout you get is fixed from the start of the term until the end. Level term assurance then guarantees a known lump sum pay-out upon death within a fixed time.
Family Income Benefit.
These policies are intended to meet the needs of parents with (or planning to have) children to offer protection in the event of their death(s). They provide for an income payable from the date of death until a fixed time in the future (e.g. the youngest child's 18th or 21st birthday).
Whole of Life Assurance.
These are policies that provide life assurance for the whole of your life. Whole of Life insurance guarantees to pay out in the event of death, whenever it occurs, generally as long as the premiums are paid. The premium you pay may also include an investment element which helps to pay for the cost of cover over time.
Critical Illness Cover.
For many the financial risks of a serious illness or injury are more important (and likely) than death, as it may lead to loss of work, treatment and additional care costs. A critical illness policy will make a lump sum payment on diagnosis of defined “critical” illnesses, serious conditions or injuries. The covered conditions, and level of payment, vary greatly from policy to policy so it is vital to read the terms and conditions of each rather than simply choosing the cheapest.
Income Protection Insurance is designed to pay a regular tax free monthly income if you are unable to work due to illness or injury, but as defined by the terms of each individual policy.
These plans have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.
Plans may not cover all the definitions of a critical illness. The definitions vary between product providers and will be described in the key features and policy document, if you go ahead with the plan.