Sometimes, the simplest questions are the ones most overlooked. It is often assumed that everyone knows what life insurance is, but plenty of people don’t know what it’s all about and until it comes up at some point in your life, such as when you get a mortgage or have children, life cover doesn’t tend to come up in conversation
Concept of life insurance-how does it work!
Life insurance/assurance is a contract between you and an insurance company stating that if you die at any point during the policy term, your family (or beneficiaries) gets a lump sum of money to help them deal with the financial loss after your death. It is typically used to make sure things like the mortgage, funeral costs and any other expenses are paid for when the policyholder (i.e. you) dies.
Like most types of insurance, life insurance involves you paying regular payments (called the ‘premium’) to the insurer, and then paying out the sum assured (the value of the agreed cover) if you die. With life insurance, there’s no obligation and you can stop your payments at any time – but if you do so, your cover will also immediately stop, and the insurance contract is terminated. So, you are free to leave the deal, but you will no longer be covered – plus, you can’t ask for them to pay back any premiums that you’ve already paid.
Types of life insurance
In brief, there are four main types of life insurance:
Whole life insurance: the simplest cover that lasts until you pass away, often used to cover funeral expenses.
Over 50’s life insurance: similar to whole of life cover that’s tailored specifically for those over the age of 50 with guaranteed acceptance, no matter your medical history.
Level term insurance: often larger-scale life insurance designed to cover you during your working life.
Decreasing term insurance: cheaper cover that’s usually tied to a mortgage. It ends once your house is all paid for.
There are some add-on’s to life insurance, such as critical illness cover or income protection, which covers you if you become seriously ill or unable to work, but the main life insurance policy only covers your death. There’s no chance of receiving a payment without that tragedy occurring.
As every one of us is different, so do our needs and requirements also differ, that is why life insurance products can also be tailored according to your requirements, age and health issues.
We would recommend you to talk to one of our advisers for life insurance quotes.
Any quote that your adviser provides you with will take into account your circumstances, your medical history, as well as your budget!
Call 011-3733-4610 – Monday to Thursday from 11.00 to 19.00 and on Friday between 11.00 and 16.00