Life insurance provides financial support for the people you care about in the event of an unfortunate incident. There are many different types of life insurance, ranging from term to whole life. This article will help you understand the basics of life insurance, what it is and what different options are available.
What is life insurance?
Life insurance is a contract through which an insured person receives money upon the death of the insured person. The policyholder (the person who takes out the policy) pays a monthly, quarterly, or annual premium to the insurer. The amount of coverage you need depends on your life situation. Such as whether you have children or other dependents who count on your income for survival.
Why do I need life insurance?
There are many different types of life insurance. Some people buy policies to replace their income if they die. Others buy term insurance just to protect their family’s financial future.
The most important reason for getting life insurance is to protect your family financially if something happens to you:
If you die unexpectedly, your family will have money they can use to pay off debts. Take care of the mortgage or even go back to school and finish their education. They may also be able to buy new furniture or appliances that help them cope with their loss.
Different Types Of Life Cover
Term Life Insurance
Term life insurance is a life cover policy that runs for a specified amount of time, or ‘term’. This covers you for an agreed period of time, for example, 30 years. This is the ‘term’ of the policy. This type of insurance is often taken out to cover a loan, like a mortgage, or to cover an ongoing financial obligation.
Whole Life Insurance
Whole life insurance is a life cover policy that is in place for the whole of your life, rather than a fixed period of time. You pay into a policy, and the insurer agrees to pay your loved ones in the event of your death. No matter when that might be. It’s a good kind of policy to have if you want worry-free cover.
Joint Life Insurance
Joint life insurance is life cover for yourself and your partner in one policy. If you have a partner and want to make sure that your other half, and children, will be looked after if one of you should die, then a joint life inusrance policy could be right for you. It insures two people at the same time, and pays out if one of you passes away. It could make life easier knowing that you are both covered, but remember that in most joint life policies, once you make a claim, the partner who is left won’t be covered any more – they’ll need to take out their own individual policy after that.
Critical Illness Cover
Critical illness cover is sometimes an option to put aside a portion of your payout that you could use if you suffer a pre-determined critical illness. It is important to make sure that you know what critical illnesses are covered by your policy, and what length of time your policy covers. It’s a useful way to help towards your expenses if you or your insured child is too ill or you’d struggle to meet bills like medical expenses or modifications to your home if required.
Terminal Illness Cover
Terminal illness cover could pay out eaerly if you are diagnosed from a terminal illness, from which you will die within a projected, limited amount of time. This may be a devastating time for you and your family, and having terminal illness cover would help you all by easing your financial worries during this time.
Children’s Cover
Children’s cover is designed to help cover extra cost like medical expenses if your child suffers accidental death or specified serious injury or illness, which could be added, at extra cost to your life insurance policy.
What Next?
Now that you’re getting clued up with life insurance the next steps would be to find out how much cover you could get & more importantly how much it will cost.
To help with this process we’ve created a Free custom form to get you a quote. Click here and answer a few simple questions. We’ll provide you with quotes tailored to suit your needs.