Alternatively A Joint Life First Death Policy Can Be Arranged

Category: Finance, Insurance.

I am a cautious person- pension contributions, mortgage payments and national insurance contributions have become an accepted part of my life.

Until now Life Insurance seemed like a scary and somewhat morbid thing to consider. I invest in these in the hope that they will make life comfortable for me when it is time to retire. I have decided to challenge my reservations and investigate the types of cover available if you want to prepare for the worst. Although these terms are often used interchangeably there is a difference: Insurance generally refers to an event that might happen whereas assurance refers to something that will happen. The first distinction to make is between life insurance and life assurance. Using this definition life insurance would generally cover accidental death whereas life assurance would cover for when the policy holder dies at the end of their life.

It is of course important that you make it clear what type of cover you are looking for. However, most companies do not make such an explicit distinction between the two. Life Level Term. The policy holder can decide on the number of years and the level of cover they require at the outset of the policy. Life level term insurance provides the policy holder with a rate of cover that stays the same throughout the policy. The policy can be set up as a single life plan in which the sum of money that has been insured is paid out if the insured person dies before the end date of the policy. This is where two people are insured with the sum insured being paid out after the death of one of the insured.

Alternatively a joint life first death policy can be arranged. People taking out this type of insurance can benefit from Critical Illness cover which means the sum insured is paid out upon the diagnosis of a critical illness. If the insured person survives the length of the policy then no money is paid out. To include critical illness cover the policy holder will have to pay an additional premium. Mortgage Life Insurance. It is a popular option for a family as it pays the outstanding balance of the mortgage in a lump sum if the insured dies before the end of the policy.

Mortgage life insurance is designed to cover the costs of a mortgage in the event of the death of a key breadwinner. As the insured is insuring to cover the cost of the mortgage the policy costs reduce over time as you repay more of your mortgage. In the latter the mortgage will be paid off in the event of one of the insured dying. Mortgage life lnsurance can also be taken out in a single life plan or a joint life first death basis. This is where the policy finishes- nothing is paid out on the death of the second insured. Critical illness cover will pay out if the insured is diagnosed with a critical illness.

This also provides the option of taking out critical illness cover for the cost of an added premium. If the insured survives beyond the policy end date then nothing is paid out. CII pays out if the insures is diagnosed with a critical illness within the dates of the Insurance policy. Critical Illness Insurance. The amount of money covered by the policy can be decided at the outset as can the duration of the policy. The policy can stand alone but it is often added to a life level term Insurance policy or a mortgage life insurance policy for the cost of an added premium. It is available as a single life basis or a joint life basis.

If the insured survives the length of the policy then the sum insured is not paid out. There are a number of companies that help you find the right policy for you by cross checking a number of different insurance companies for quotes.

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