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Don't
leave it to chance
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It goes without saying that sensible
people insure their valuables for their full replacement
value, so that if anything happened to them, they could
be replaced.
Doesn't it follow, then, that we should also insure
the most important asset of all -ourselves - for our
full replacement value? Amazingly, although many of
us insure our cars, homes and contents, we totally ignore
ourselves - an omission that could have a devastating
impact on our loved ones left behind.
Life choices
There is a wide range of life insurance policies available
to meet different requirements. They are basically designed
to replace lost income and/or provide a capital sum
when it is probably needed most - in the event of death.
So what are some of the options?
Level Term Assurance
A level term assurance policy guarantees an agreed amount
of cover over a fixed term. A lump sum is paid out if
death occurs before the policy ends. Level term assurance
has no surrender value when the policy ends, or if it
is surrendered before the end of the term.
Decreasing Term Assurance
Here again, decreasing term assurance pays out only
if death occurs before the policy ends. This type of
cover is popular with people taking out repayment mortgages,
as the sum assured reduces roughly in line with the
reducing amount of capital owed on the mortgage. If
death does occur before the mortgage period ends, the
policy will pay out a proportion of the sum originally
assured.
Renewable Term Assurance
This allows you to extend the original policy once it
has come to an end without the need for further medical
evidence. Renewable term assurance enables your insurer
to review your premiums at the renewal date and then
adjust them as necessary to reflect changes in costs
due to age term.
Family Income Cover
With family income cover, the monthly premium remains
the same throughout the whole term and the policy pays
out only if death occurs before the end of the term.
The payout comes in the form of a chosen amount of regular
income, which is paid until the end of the term. Some
companies allow the benefit to be commuted into a lump
sum.
Convertible Term Assurance
This gives you the option to convert your protection-only
policy into an investment-linked insurance policy at
a later date. On specified dates, agreed at the outset,
you can have your policy converted. This is based on
your health at the time you took out the original term
insurance and the type of policy to which you are converting.
Whole of Life Cover
Whole of life cover pays out a lump sum in the event
of death, no matter when it occurs. Whole of life policies
are generally used to provide security for a family
throughout one's life and can also be used as a facility
to plan for inheritance tax mitigation.
To review your life assurance requirements, please
e-mail or
contact us for further information. Leaving
it to chance could mean a lower standard of living for
your loved ones. |
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32%
of British adults have no life cover and a further
27% believe they are making inadequate provision.
(Source: Association
of British Insurers 2000)
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The Financial Services Authority does not regulate all types
of Term assurance, Critical Illness products
and Trust advice. Unless linked to an investment
vehicle these policies will not acquire a surrender
value and will lapse at the end of the term
with no value. Levels and bases of, and reliefs
from, taxation are subject to change. If linked
to an investment vehicle, investment values
may fall as well as rise. You may not get back
the full amount invested.
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