Insurance World

Now that so many term life insurance policies are available online, it makes sense to use this option when you are looking for protection for your family, you can take your time to consider all the different types of term insurance, and the different rates available. There’s a ready supply of information, which puts you in a position of knowledge and will help you to make the correct decision.

There are several different labels applied to term insurance, but basically it comes down to three different types.

First, there is Level Term Insurance. This is designed to pay out a lump sum on the death of the life or lives assured, this type of policy can be used to cover immediate expenses i.e. funeral estate taxes outstanding debts, this type of term insurance can be written on either a joint or single life basis.

Perhaps the best-known type of term insurance is that associated with a mortgage, which not
unsurprisingly is called Mortgage Term Insurance. It is designed to cover the declining balance on the outstanding mortgage on your home. It is a very cost-effective type of term insurance because it is covering a reducing liability as a mortgage comes down so does the level of cover. This type of life insurance can also been written on either a single life, or join life basis.

The third main type of term life insurance is Family Income Benefit, unlike the previous types, as its name suggests this type of policy is designed to pay a regular income, rather than a lump sum. This type of policy has been rather overlooked until recently, but now that interest rates are so low, it is gaining in popularity, because of the extremely large amount of capital that is required to be invested to produce a reasonable level of regular income. By taking the Family Income Benefit route, you can sometimes save as much as 50% of the premium cost.

All the above types of policy can have various additional benefits added for instance, critical illness cover, guaranteed insurer ability options, automatic renewable options, etc obviously not all companies offer all the benefits, and it does require you to compare the cost of the policy with the benefits provided. However, by shopping for your life insurance online, you are better able to do this for yourself and hopefully will end up making the correct decision.

Term insurance is a very low-cost option, and while some would argue that it is better to go the whole of life route, with such a low-cost option, there is no need for any family to be without some life insurance or term insurance protection.

Roger Overanout

Unless you have substantial savings, even in the UK, contacting a serious illness, such as cancer, can be a very costly affair. Above all, not only do you need to consider how contracting such a critical illness will affect your savings in any medical care bills, but you also need to consider that you may well not be able to earn any income to cover you day-to-day expenditure. As a result, making sure you take out a critical illness insurance may well be one of the wisest and astute financial decisions you make.

What Is Critical Illness Insurance?

In short, a critical illness insurance policy is very much like any other insurance policy you take out. Here, however, your premiums go towards insuring that you do not contract a critical illness. In the event that you do contract a critical illness, your UK insurance provider will pay you out a tax-free lump sum to help you cover the day-to-day costs of having to live with your new medical condition.

Are There Any Limitations With Critical Illness Insurance?

Yes; it is essential that you look at the list of critical illnesses that your insurance policy covers, as these will be the only illness under which the policy will pay-out. In other words, the UK insurance provider will not pay-out on the policy simply because you have a doctor’s certificate that you have a critical illness, it needs to be one of the designated critical illness.

Moreover, if you are considered by the UK insurance provider to be a high risk – for example, if you smoke – then it is likely that either you will not be able to obtain the critical illness insurance, or your insurance premiums will be significantly higher than if this were not to the case. Importantly, you will need to disclose whether or not you have any existing conditions, in which case these will likely not be included, and whether or not your family has a history of the illnesses set out in the policy, in which case this will likely affect your premium payments.

How Will I Be Paid?

As mentioned, with a critical illness insurance your UK insurance underwriter will pay you out a lump-sum tax free amount once you contract one of the critical illnesses listed in the policy. Having paid out the lump-sum amount, your relationship with the UK insurance provider will come to an end. In other words, you will not have an ongoing relationship with the insurance provider paying you intermediate payments.

Is It Worth Having Critical Illness Insurance?

The question of whether or not there is any value in you having a critical illness insurance will depending largely on your age, expenses, and whether or not you have any other insurance. Essentially, critical illness insurance covers an area for which other types of insurance can be obtained. However, unlike other types of insurance, this is a very specific insurance policy paying out for a very specific purpose. That said, there is a strong argument that you can never really have too much insurance and will numbers seemingly showing that more and more of us contracting critical illnesses as we grow as an aging population, this type of UK insurance is always useful.