Life Insurance -
Best value life insurance
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Life insurance is not a difficult type of insurance, in fact it is about as easy as insurance can be. There are however ways in which you can gain the best value when you take out a policy, which can save you money on your premiums. A variety of policies will pay out some kind of money, if you suddenly become seriously ill, as well as if you are unable to work.
Life insurance is the cover that will ensure that a specific amount of money is paid out if you die. Life insurance is different to every other type of insurance as, there are no other criteria with regards to the insurer deciding whether or not you can claim. It is quite simple you are either dead or your not.
What this means for the potential consumer, is that all the policies generally speaking will more or less be the same. So those hoping to take out a policy can look for the cheapest policy without compromising on the level of cover. There are three types of life insurance available to you, they are decreasing term assurance, level term assurance and whole-of-life insurance.
Level term assurance is taken out for a certain duration, which is referred to as the term. The term itself is set up depending on how long the customer requires the cover for. This could be based upon the amount of time the customer feels their family is to be financially dependent on them, or even the term of their Mortgage. The lump sum that level term assurance pays is the same throughout the term.
For decreasing term assurance, the sum that the insurance pays reduces over a period of time. This is so that it can be purchased and combined with a repayment mortgage, in which the amount the individual wants covered, gradually decreases in line with the debt. Due to this fact decreasing term insurance tends to be cheaper than level term insurance.
With whole-of-life insurance in the event of death the individual is paid a guaranteed amount for which there is no specified term. However the premiums attached to this type of policy can vary. A percentage of the premium you pay is invested and its increase contributes to keeping your premiums low. Recently there has been news of a significant increase in whole-of-life premiums. These type of policies are very often used as part of inheritance tax planning, so you should consult a financial adviser before buying one.
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