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Types of life insurance policy
There are many different types of life assurance policy available in the UK. Across the board, the cost of life insurance will vary considerably depending on the characteristics of the person applying. These characteristics include health, age and occupation.
To ensure continuity of cover, it is essential to meet monthly contribution payments. Furthermore, to ensure the policy finally pays out, it is imperative that you disclose all material facts about your health and occupation at the start of the policy.
Non-
As an individual holding a life assurance policy, you are termed ‘life assured’ with an ‘own life policy.’ This is not the case in all life insurance policy types: some may take the form of ‘life of another’ or ‘joint life first death’ policies. Monthly contributions will vary considerably between types. There are three major types of life assurance policy: term assurance, whole life and endowment assurance.
Term life assurance is one of the most commons types of life insurance policy, and also one of the most simple. Term life assurance only pays out if ......
Decreasing Term assurance is another type of life assurance policy, often used to cover mortgage payments.
The payout sum on the policy will reduce .......
Index linked term assurance is an option provided by some insurance companies.
This links the amount of cover and the monthly contribution to the RPI (Retail Price Index.)
In some instances this will be automatic, others will have to be renewed every year.
Whole-
As long as you maintain the monthly contributions, the cover is assured. Because of the increased security offered by this kind of policy, the monthly contribution is generally more expensive than term life insurance.
Family income benefit, an underused type of protection plan in my opinion, allows the benefit ....
Convertible term assurance allows you to convert a term policy to a whole-
Endowment life assurance policies are savings schemes with life assurance attached.
They were more common during the 1990s, and were often linked to mortgages.
They are designed to pay out any returns at the end of the policy, or should you die during the term of the plan they pay out a lump sum.
Jeff Prestridge, Personal Finance editor of the Financial Mail on Sunday wrote this in Financial Adviser, a paper for financial advisers.
‘.. Let me state straightaway, that I am a firm believer in protection insurance. Always have been and always will be. It was drilled into me... ..that protection should come before investing.
Put the protection foundations in place and then the other key components of financial planning can be slotted in from a position of strength.
Source: Financial Adviser 6.3.2008