types of life insurance services


There are three types of insurance policies:

1. You can simply protect those who depend on you against your death by taking out Life Cover.

2. You can be covered if you're diagnosed with a serious illness like a heart condition or cancer. This is up to six times more likely to happen to you than dying before age 65. This type of insurance is called Critical Illness Cover.

3. You can protect against losing your income through disability, no matter how it's caused with Permanent Health Insurance (sometimes also referred to as Income Protection). Life and Critical Illness Cover can be bought together, and in different ways:

*on a level basis - fixed premiums for a fixed number of years and a full payout on claim at any point. Almost always the right choice for family protection and "interest-only" mortgages

*on an increasing basis - costs more, but cover goes up every year without any medical (and so does the premium). Not so popular, but should be because people need more cover as inflation and their income rises.

*on a decreasing basis - a cheaper option as premiums are lower to begin with. Payout reduces over the cover period, in line with a repayment mortgage. Not much good for anything else, but ideal for those on a tight budget.

*on a renewable basis - a short term policy - which makes it cheaper initially, but more expensive long term. Importantly, it can be renewed without medical evidence.

Any claim can be paid as a lump sum, or as a monthly income with Family Income Benefit.

You should seriously consider putting your policy in trust. This means that the proceeds of your cover will be paid in a straightforward way to your dependants without affecting your will, your estate or the taxman.