Life Insurance

How To Make Sure You Get The Right Life Insurance For You

What would happen to your family if you weren't there or were unable to earn a living? Life insurance may be able to help you to sleep better at night.
By Katie Brown

Possibly on of the only truly altruistic acts one can make in life in to take out a life insurance policy in order to look after your loved ones in the event of your untimely departure. However, with so many different types of policies available it's important to be able to choose the right on

e for you and your family so that everything you need to cover is covered, as well as ensuring that you are not paying for any features that you don't need.

What are the different types of life assurance?

The basic criterion of a life assurance policy is that it pays out a lump sum on the policyholder's death. Beyond that there are a bewildering number of permutations and combinations and a baffling array of jargon. The two broad areas of life insurance are protection only and investment.

- Protection only:

Known as "term insurance", protection-only policies pay a specified amount if you die within a defined period. If you survive it pays out nothing.

Within this category there are various different types of policy including decreasing term (more widely known as mortgage protection) where the sum decreases commensurate with your mortgage commitments; level term, which pays out an assured sum that remains unchanged throughout the term; and increasing term which is linked to inflation.

- Investment One of the most popular forms of investment life assurance is the endowment policy. This is essentially a savings scheme with the added bonus of life insurance and pays out a sum of money if you die within a certain period OR pays a sum of money out at the end of that agreed period if you survive. This sector also includes "Whole Of Life" insurance, which guarantees the payment of a lump sum when the policyholder dies whenever that is (as long as you keep up with your payments).

Whole life policies came in many shapes and sizes and include such flavors as 'non-profit' which pay out a fixed sum, and profit which also pays out profits earned on the investment. Your choice of life assurance is going to be dictated by several factors. First of all, look at your family circumstances - do you have a mortgage? Would your partner be able to continue to make mortgage payments in the event of your death? If not, then mortgage protection is a must.

You spouse will not only likely need to replace your income following you death in order to look after your children, but will likely also need to address perpetually mounting costs such as school fees and childcare. Once you have addressed your needs you can then look at what else you can afford - for example, do you want to leave something for your children in the event of your death? Do you want to enter into a life assurance policy such as an endowment purely for investment purposes?

Whatever your requirements, once you understand what is available, you can use online resources to make your decision easier.

Contact us today to take the next step - 704-831-6001

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