Life insurance or Life assurance is a contract between You, the policy owner and the insurer, where the insurer promises to pay a designated beneficiary a sum of money (the benefits) upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger payment.
In return, the policy holder agrees to pay a stipulated amount (the premium) at regular intervals or in lump sums.
Mortgage Life Assurance / Mortgage Life Insurance:
Mortgage Life Assurance is used to protect your mortgage against the risk of you dying and leaving it behind for your family to continue paying.
Mortgage Life Assurance is only suitable for mortgages which are Capital and Repayment because the level of cover is designed to reduce as your mortgage reduces over the years.
The reduction ensures that there is always enough in the 'pot' to pay off the mortgage if the worst happens but there will be very little surplus remaining.
Term Life Assurance/Term Life Insurance:
Term Life Assurance is the opposite of Mortgage Life Assurance in that the amount of cover remains the same throughout the term of the policy and does not reduce. This type of Life Assurance is suitable for those people with Interest Only mortgages, those wishing to cover funeral expenses and people wanting to leave a sum of money behind to ensure their families standard of living.
Level Term Life Assurance/Level Term Life Insurance:
Level Life Assurance or Level Term Life Assurance is another term which is used to refer to Term Life Assurance. Normally the cheapest forms of life cover. The face amount remains level throughout the stated period. This policy is often purchased for short term debt or intermediate term debt
Decreasing Life Assurance / Decreasing Life Insurance:
Decreasing Life Assurance is a term used to mean the same as Mortgage Life Assurance. The 'decreasing' refers to the reduction in cover over the years.
This is a variant of the level term life insurance. It provides a level amount of insurance but the premium increases each year at the policy renewal date.
Whole of Life Assurance:
A whole life insurance policy is a policy that generally pays guaranteed sum in the event of the death of the insured to the dependents of the insured. In some cases, the earlier diagnosis of a critical illness also results in the said payment. . This insurance can be without-profits, with profits or unit-linked. Whole life insurance policies are sometimes called straight life insurance policies or permanent life policies.
Family Income Benefit:
Family Income Benefit pays out a regular annual income in the event of death or diagnosis of a specified critical illness, during a specified period for your dependants. Actual payments can be half yearly, quarterly or monthly.
This kind of life insurance pays out the sum insured only on diagnosis of the insured person having contracted one of a range of specified critical illnesses. These illnesses usually include heart disease, stroke, and cancer. This is not offered as a standard part of a life insurance policy. Our broker partners can provide can provide critical illness cover in addition to a standard life insurance policy.
Guaranteed premiums usually are fixed by the insurer and remain the same throughout the policy term. If you have chosen the indexation option, in which case the premiums will also rise linked to inflation.
Reviewable premiums are usually increased by the insurer at regular intervals, usually every five years. The benefit of selecting a 'reviewable' plan is that usually the premium starts off at a much lower level than a guaranteed plan, particularly when critical illness has been selected as an option.