Money or your life or both?

Life assurance is more of a flexible friend than you may think. It all depends on your needs.

There are so many different varieties of insurance linked to the life of the policyholder and so many life assurance companies with similar offerings that expert advice can be invaluable.

Term assurance

At its simplest, in exchange for paying a premium, the life office will agree to pay out a certain sum if the insured dies before a certain date.

If the policyholder does not die within the term, the policy merely lapses. There is no payout of any sort. These policies are usually cheap to buy and they perform the useful function of providing protection for those who benefit from the policy, such as family members, if the policyholder dies.

The same principle of protection applies to a number of other types of insurance whether the benefit is, for example, to provide specific help to the deceased's family, or to repay a mortgage.

Level Term Assurance

Level Term Assurance Plans are usually quite affordable and flexible. You can choose joint or single life, the amount and length of cover, and optional critical illness cover.

• Pays out a pre-agreed lump sum, normally tax free, if you die during the term
• Choose critical illness cover and the plan will pay out if you are diagnosed with one of the specific illnesses mentioned in our key features document, during the term. How you spend the money is your choice
• Please note the price you pay will depend on your personal circumstances and if you do not pay your premiums cover will cease.

Convertible Term Assurance

Convertible Term Assurance is a term assurance policy with the option to convert before expiry into a qualifying whole life or endowment or, with some policies, a level term or a further convertible term ansurance policy.

Examples of Use
• A young person with the need for life cover and who has limited resources and unknown future requirements or commitments.
• Protection for a potential renewable loan facility and also business protection (sometimes what is known as keyperson insurance).
• Someone who requires cover at low cost, with guaranteed insurability to convert to a longer-term contract if required.

Term & CIC Combined

Under a combined Life Insurance and Critical Illness policy, the sums insured are usually the same but they don't have to be. If your combined Life and Critical Illness policy is specifically used to protect a mortgage, then yes, the sum insured should always be the same for both the Life and Critical Illness provisions.

If you obtain an online quotation for a Life and Critical Illness policy, then the quotation will always be based on the same sum insured for both the Life and Critical Illness provisions. Quotes are provided on this basis because that's what most people are looking for.

However, if for any reason you do want the insured sum for Life to be different to the insured sum for Critical Illness, then we will be able to arrange that for you.

Endowments

These are a common form of investment policy. Regular premiums are paid, and when the term of the endowment expires a lump sum is paid out. The lump sum may be used to repay a mortgage, for example.

Most endowments have a protection element such that if the policyholder should die then a lump sum becomes payable.

Whole-of-life policies

Similar in nature to term assurances, whole-of-life policies provide cover for the whole of the insured's life. Generally more expensive than term assurance because there is certainty that the policyholder will die at some time. The benefit payable on death will be either a lump sum or the value of the invested fund, whichever is higher.

Family Income Benefit

These plans are the most cost-effective form of family protection. Instead of producing a lump sum in the event of your death, the policy produces a regular tax free income for your dependants for the remainder of the plan term. This saves cost, tax and a lot of hassle for your family at difficult times.

The amount paid each month can be set to rise with inflation, or to remain level over the plan term.

This type of policy is payable for a set number of years from commencement, so for example a claim made in year 18 of a 20 year term will only pay out for two years. That's why it costs less. Most people underinsure because they don't appreciate that you can only get £5,000 out of a £100,000 lump sum after tax.

Income Protection

Short Term Income Protection Insurance cover gives you peace of mind paying you a monthly tax free income if you become unemployed, have an accident, or become sick.

ASU

Accident, Sickness and Unemployment Insurance is an income protection policy that is designed to give you peace of mind, that should you be unable to continue providing for yourself or others due to redundancy or disability, you won't be left in complete financial disarray.

Unlike mortgage payment protection policies, this type of income protection is not designed to specifically pay off your mortgage or other loans, nor will it pay for private medical treatment or special needs that arise through disability. What it will do is provide you with a regular income if you become unable to work as a result of accident, sickness or disability.

Unlike payment protection policies, the amount of benefit that is paid out it is not linked to your mortgage or other loan payments, but your overall level of income.