This is a basic policy which pays out on death of the policy holder. The first thing to think about is why cover is needed. You may want to protect your mortgage, your family, or a combination of both.
If you wish to pay off your mortgage in the event of death, then your cover will be determined by the type of mortgage you have. If you have an interest-only mortgage, you will need a level term policy to ensure your mortgage debt is paid off. If you have a repayment mortgage, you can choose to have a decreasing policy which means the amount of cover decreases in line with your mortgage. Because the cover reduces over time, the cost of this type of plan is cheaper than a level term plan.
If you have a family, you’ll want to ensure they are financially secure if you were to pass away. Most people take out a level term policy –one where the benefit stays the same over the life of the policy – to do this. The amount of cover you choose will be determined by how many dependants you have, what plans you have for your children, and of course your budget. Are you expecting your children to go to university for example? You may have seen in the press lately that it’s estimated to cost £260,000 to raise a child until the age of 21 which is a lot of money. How would your family cope financially if you were not around? We can help you choose the right level of cover for your circumstances.
Level Term Assurance
Fixed premiums for a number of years and a full payout on claim at any point during the term.
Increasing Term Assurance
The cover increases every year without the need for a medical. Not as popular as Level Term, but it should be as people may require additional cover in line with increases in their income and inflation.
Decreasing Term Assurance
The payout reduces over the cover period at a flat fixed rate each year.
Mortgage Protection Assurance
Life assurance where the lump sum reduces in line with the outstanding mortgage balance over time.
Renewable Term Assurance
A short term policy and therefore cheaper initially, and commonly used for protecting Company Directors. Importantly, it can be renewed without further medical evidence.
Family Income benefit Insuarance
Instead of paying out a lump sum, this type of cover provides a tax-free annual income until the end of the term specified at outset. Many customers are not aware that it’s possible to have a policy that pays out an income instead of a lump sum. A lump sum of say £150,000 may seem attractive, but what will your family do with it? How will it be invested? Will it really last until your children are no longer financially dependant? This is why we believe choosing an income is a very sensible alternative. You choose how much money you want your family to receive each year and for how long. For example, you can simply choose an amount to match your own take home pay. They won’t have to worry about investing a lump sum, and you have the peace of mind knowing that they will receive a regular amount of money that is easily manageable. This option also offers very good value for money.