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The
financial pressures of the modern world
can often be quite daunting. Bills, mortgages,
credit cards; these are only the beginning
for working individuals who also have
a family or other loved ones to support.
It is not an easy thought to contemplate,
but as a result of these financial pressures,
the untimely death of a family or household’s
primary earner is something that everyone
should be prepared for.
This
is where these policies can help. Several
different types of policy are available,
all existing for the primary purpose of
providing financial support to your family,
dependants or loved ones in the event
of your death. This goes some way towards
helping your dependants pay the bills,
keep up with any outstanding mortgage
repayments, and generally maintain the
standard of living to which they are familiar.
The
most common form of deal is "term"
based; this type of policy works by guaranteeing
a fixed amount of money in the event of
the policy-holder’s death over a
fixed term of for example, 5, 10, 25 or
more years, as long as the premium payments
are kept up to date. Cover is provided
only for the duration of the term under
which the policy was agreed. Flexibility
is also often offered with regard to how
to wish any payouts to be made. Regular
monthly payments can be made by the company
(which effectively “replaces”
the income of the deceased), or a single
lump sum payment can be made by the company,
in the event of a successful claim. Other
common forms of cover are mortgage protection,
which protects your family’s home
in the event of death, as it guarantees
payment of all outstanding mortgage debts,
and family income benefit, a policy that
provides a regular household income. Providers
can also sometimes provide critical illness
cover, which provides you with financial
assistance should you fall victim to an
illness or injury which prevents you from
working.
When
shopping for a deal, be aware that the
price of premiums are often subject to
change; they are index-linked to change
in accordance with factors such as inflation.
This is relevant because it is often a
long-term investment, in that you will
plan payment of premiums for several years.
Policies will often be advertised as either
guaranteed or reviewable. A guaranteed
policy means that the price of your premiums
remains fixed throughout the term of your
policy. Conversely, a reviewable policy
allows the insurer to alter the cost of
premiums at their discretion. Guaranteed
policies often initially seem to be more
expensive, but they can be the significantly
cheaper option in the long run. |
Life
Insurance 
Life
Insurance - What Is It?