Life Cover and Critical Illness can be a very important part of a person’s life, particularly where families or debts are concerned. Sadly overlooked by many people. There are several types of life cover policies available depending on your requirements as follows –
Decreasing Term Assurance (Mortgage Protection)
This type of life cover is commonly used to protect a mortgage loan. This is the cheapest type of life cover as the benefit decreases in line with the mortgage loan. Cover has to be provided for the same term as the loan. As an example if you arranged a policy to cover a £200,000 mortgage loan over a 25 year term and died one year before the end of the term, the policy would only pay the amount you still owed the Lender, which would probably be around £6,000.
Level Term Life Cover
This type of life cover is commonly used as a family benefit. For instance, people who already have Mortgage Life Cover (as above) may feel that they would like a separate lump sum to be paid into their estate on death to provide for their loved ones. The benefit for this policy always stays level. Therefore if you arranged this type of plan over say a twenty year term with a benefit of say £100,000 then, even if you died the week before the policy ended your family would still receive £100,000.
Whole of Life Cover
As the name of this type of cover implies, this type of policy continues until death, whenever that may be, so it does not actually have a set term. Mostly used for Inheritance Tax purposes, the benefits normally increase each year as do the premiums. This type of policy also initially gains an investment content. Once the policy has started you cannot be underwritten again in the future, although premiums and the benefit as previously stated will increase each year normally by a set amount such as 5%. It is important to remember that at the age of 60, 65, 70 and every 5 years thereafter the policy benefits will be reviewed which could well lead to an extra increase in the premiums on those anniversary’s.
Critical Illness
Statistics prove that there is more chance of suffering from a critical illness than there is of death. This type of cover pays out as soon as a Consultant confirms that you have one of the illnesses as specified in the Providers policy, therefore you do not have to die to make a claim. This cover is also very important because some people suffer an illness which means they will never work again, but of course they still have debts to pay. Critical illness can normally be added to any of the above life cover policies, and is the most valuable addition to the cover you could make.
Extra Benefits
Some types of policies allow extra benefits to be added (which will normally increase the monthly cost) such as –
- Waiver of Premium, which means that if you are off work for more than a six month period the Provider would then continue the monthly premiums on your behalf to keep the policy in force until your return to work.
- Terminal Illness Benefit, which means if you have less than 18 months to live the Provider would pay the benefits early.
- Guaranteed Premiums, this simply means that you fix the premiums at the beginning of the policy so they can never rise in the future.
We can also arrange the following types of policies –
Accident, Sickness and Unemployment (ASU)
Build & Contents
Mortgage Payment Protection
Private Health Care (PMI)
Income Protection (PHI)
How to Apply
If you would like a quote please complete the form shown on our website and we can research the whole market for you.
Whether you are interested in Life Cover and Critical illness to cover your mortgage loan or just life cover or separate critical illness cover to provide money for the family, please supply us with your details and we can provide you with a free no obligation quote. You are probably aware that life cover only pays on death, whereas critical illness pays on diagnosis of an illness as specified in the Key Features provided by the relevant insurer, in other words you don’t have to die to make a claim. Both types of cover are very important however statistically there is more chance of suffering a critical illness than there is of death. You can also include on the policy, guaranteed rates, guaranteed premium, joint cover or single cover, terminal illness, waiver of premium, etc.
Keywords: Life cover and Critical illness, death benefits, critical illness benefit, mortgage protection, family protection
