Life Cover provides financial protection and peace of mind to your family if you die during the term of the cover. Typically it provides a lump sum payment which can help maintain the family lifestyle and outgoings and possibly clear any debts. There are three main types of personal life cover policies:
Decreasing Term
This is typically used for mortgage purposes. The policy is taken out for a term equal to the mortgage and the cover decreases in line with the outstanding debt.
Guaranteed Term
This is where you take out cover for a specific amount, for a specific length of time and at a fixed price. You can have the cover indexed so it increases yearly to allow for inflation. The premium also increases. You can also include the very valuable Conversion Option which allows you retain the cover beyond the expiry date without the need for further medical underwriting.
Whole of Life
Whole of life assurance guarantees a lump sum payment whenever you die, as long as you continue to pay the premiums. Premiums can be reviewed and may increase as the policy continues. This type of policy is very often used for and can be very effective for estate planning.