When many people think of life insurance, they tend to think only of basic life insurance which pays out a lump sum when the person covered dies. However, life insurance is much more than that; there are far more options available when it comes to covering someone against what life can throw at them.
In response to an ever more competitive market, many life insurance policies now come with one or more freebies. One of these ubiquitous freebies is terminal illness cover, which allows a life insurance claim to be paid out in advance of the death of the insured. The proviso for this is that the insured must have a terminal illness and have a short life expectancy; also, if a terminal illness claim is made the policy will not pay out a second time on death.
Critical illness cover is also available, paying out a lump sum when the insured contracts a critical illness. The definition of these varies by policy, and it is worth checking what is covered before taking a policy out. Critical illness cover comes either as a standalone policy, or as a bolt on to a life insurance policy. In the latter case, if the plan pays for a critical illness claim it will not pay upon death.
Mortgage protection is life insurance with a fixed term, which is level or decreasing depending on the type of mortgage it is taken out to cover. These policies can also have critical illness bolted on, so if the insured gets severely ill and can't work, the mortgage need not be a worry. If the policy expires and a claim is not made, nothing is payable back to the insured.
As with any major financial decision, consulting a financial adviser is usually a good idea before ploughing ahead with any choice, as they may be able to find you a policy you never thought of.
In response to an ever more competitive market, many life insurance policies now come with one or more freebies. One of these ubiquitous freebies is terminal illness cover, which allows a life insurance claim to be paid out in advance of the death of the insured. The proviso for this is that the insured must have a terminal illness and have a short life expectancy; also, if a terminal illness claim is made the policy will not pay out a second time on death.
Critical illness cover is also available, paying out a lump sum when the insured contracts a critical illness. The definition of these varies by policy, and it is worth checking what is covered before taking a policy out. Critical illness cover comes either as a standalone policy, or as a bolt on to a life insurance policy. In the latter case, if the plan pays for a critical illness claim it will not pay upon death.
Mortgage protection is life insurance with a fixed term, which is level or decreasing depending on the type of mortgage it is taken out to cover. These policies can also have critical illness bolted on, so if the insured gets severely ill and can't work, the mortgage need not be a worry. If the policy expires and a claim is not made, nothing is payable back to the insured.
As with any major financial decision, consulting a financial adviser is usually a good idea before ploughing ahead with any choice, as they may be able to find you a policy you never thought of.
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