A Basic Introduction to Life Assurance
Essentially the terms life assurance and life insurance both means the same thing. They are financial products available to protect your family in the event of unforeseen circumstances by offering financial stability after your death.
UK life insurance policies are generally for those with financial commitments and who have family members dependent on their income. In return for contributing a regular payment, the life insurance policy will pay out a sum of money upon the holder’s death. This money may be used to cover any financial outgoings i.e. funeral expenses, mortgage repayments, outstanding loans or any other debts you leave behind.
Life assurance policies can also be used as a method of saving and if at the end of the period of cover the person insured is still alive the policy pays out regardless.
The cost of life insurance depends heavily on just how healthy a person is and the only way to reduce the cost of a policy is to adopt a healthy lifestyle.
There are two main types of UK life assurance:
Protection only or term insurance - provides life insurance coverage for a specified term of years for a specified premium however the policy does not accumulate cash value. Term is generally considered "pure" insurance, where the premium buys protection in the event of death and nothing else. Term insurance premiums are typically low because both the insurer and the policy owner agree that the death of the insured is unlikely during the term of coverage.
Investment type or whole-of-life policy - this provides cover for as long as you live and builds up an investment value that you can cash in if you choose to surrender the policy. Life Assurance was the original product offered by Life Assurers based on the idea that eventually the product would be enforced. Assurers paid out on event of death, or circumstance leading to death, which resulted in the product being known as 'Whole of Life'.
Most companies offer a number of Life Insurance products which are suited to individual requirement. There are a number of different products now available each offering specific financial help and terms and conditions in the event of death. The 3 main types of cover you need to consider are:
- A lump sum payout and/or income if you die
- A lump sum payout and/or income if you become critically ill
- A replacement income if you are unable to work due to illness or accident.
Compare over 95% of the UKs Top Life Insurance deals online with www.moneyoutlet.co.uk.
Published on September 18, 2007
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