Life Insurance

Life Insurance is a protection policy that pays a cash lump sum to your loved ones in the event of your death, or to you in the event of a terminal diagnosis (less than 12 months to live). If your loved ones are financially dependent on you, then a Life Insurance policy can provide you with the peace of mind that they will be taken care of if you are no longer there.

A Life Insurance policy can be used by your beneficiaries in any number of ways, but the funds are often used for:

• Repayment of a mortgage or loan
• Maintenance of current standard of living despite the loss of your income
• Funeral expenses

When applying for Life Insurance you should have realistic expectations as to the amount of cover that you need. Factors such as your age, smoker status, general health and income will all play a part in the decision as to which insurance provider is best for you and to the amount of cover that you can afford.

Life Insurance comes under many headings: Life Assurance, Term Life Insurance, Term Life Assurance or Mortgage Life Insurance. Regardless of the name used for the policy the premise of the cover is the same:

• You pay a monthly premium to insure your life over a set period of time
• You can choose a Life Insurance policy that has either a Decreasing, Level or Increasing benefit
• Upon a successful claim your beneficiaries will receive a tax free sum of money

There are so many choices when it comes to Life Insurance that it is worthwhile speaking to an insurance adviser who is familiar with the products and can advise you on the correct cover for you needs.

There are two main types of Life Insurance available for you:

• Level Term Life Insurance: With Level Life Cover the policy benefit, or sum assured, is guaranteed throughout the policy. This means that the sum assured that you choose at the start of the policy will remain the same until the end of the policy. A Level Term policy should be used to cover Interest Only mortgages and loans, or for general family protection.
• Decreasing / Mortgage Term Life Insurance: With Mortgage Life Cover, the sum assured decreases over the term of the policy to mirror the reduction in your liabilities over time. This policy is often used to protect the Capital on a mortgage or loan.

Because of the nature of how this policy works the insurance companies can often be very strict with hazardous occupations, foreign travel, pre-existing health conditions and hazardous pastimes.