Life Insurance

Monday, March 08, 2010

Life insurance is designed to pay out a one off cash lump sum if you die during the duration of your policy.

What is Decreasing Term Life Insurance?

• Decreasing term insurance provides life insurance cover that decreases over a set number of years. This is useful for people with a mortgage or other loan that decreases over time, as the amount of cover needed is less as time goes on.
• The payout could help pay off your repayment mortgage or loan if you should die during the term of the plan. There is no cash-in value at any time.
• The monthly premiums you pay remain the same throughout the policy, but are set to take into account the reducing amount of cover, so they are often cheaper than with other types of life insurance.
• This type of cover pays out if you are diagnosed with a terminal illness (terminal illness benefit does not apply in the last 18 months of the policy, and life expectancy must be less than 12 months). If terminal illness benefit is paid out, the plan will come to an end and there will be no further payment in the event of death.

What is Level Life Insurance?

• Level life insurance is designed to pay out a one off cash lump sum if you die during the duration of your policy
• You choose the amount you want to be covered for and how long you want to be covered, then pay a set amount every month (certain conditions apply)
• The lump sum paid out remains the same throughout the duration of the policy
• This type of cover also pays out if you are diagnosed with a terminal illness (terminal illness benefit does not apply in the last 18 months of the policy, and life expectancy must be less than 12 months)
• However, level life insurance policies will only pay out once within the agreed time, so if the policy pays out due to a terminal illness claim, the policy and cover will then end. This plan has no cash in value at any time.