Protecting what Matters
Ensure the security of your loved ones - At a time of loss, the last thing you want to worry about is financial stability. With life insurance, you can rest assured that your family will receive a tax-free lump sum in the event of your passing. Protect those who matter most to you with peace of mind.
Mortgage & Family Protection
Life cover
If you need convincing that life insurance is a good product to buy, ask yourself this question. If you were to die, how much money would your family have to live on? Many families would find themselves running short of money very quickly. Your salary would stop, but the household bills and mortgage repayments would still need to be paid.
A payout from a policy could make the difference between your loved ones facing a financial struggle at a challenging and emotional period in their lives, and being able to maintain the sort of lifestyle they enjoyed when you were still around.
Most people tailor their policy to ensure that their financial commitments would be met in the event of their death, so policies are often aligned with the term of a mortgage or other loan.
Life insurance isn’t the only form of protection policy you can take out. Here are some other policy types that families with mortgages often consider.
Income Protection
This type of policy pays a monthly income tax-free if you are unable to work due to an illness or injury. The monthly income under the policy will be between 50 and 70 per cent of your salary and will be paid until you are fit enough to return to work, or reach retirement age.
State benefits often aren’t very generous in this area and only a few employers will continue to support their staff through a long term illness, so income protection policies can help families through difficult financial times.
You can choose the date at which the policy would pay out in the event of a claim. This can range from a month to up to a year. Policies that pay out sooner will have higher premiums.
Critical Illness
Critical illness cover pays out a tax-free lump sum if you are diagnosed with a major illness as specified in the policy, for example cancer and heart disease. Some insurers will make a part payment on an early-stage diagnosis of a condition specified in the policy, the percentage will vary from company to company.
Many people buy a combined life and critical illness policy, and it often makes sense to do so. In this case, a payment would be made on either diagnosis of a critical illness, or death, whichever is the sooner. If the cover is combined in this way, the policy premium is usually cheaper than it would be for separate policies, as there is only ever one lump sum paid out by the insurance company.
What Goes Into the Price of Your Protection?
Understanding what affects the cost of your life insurance, income protection, or critical illness cover can help you make informed decisions and find the right policy for your needs.
Here are some of the key factors that insurers consider when calculating your premiums :
Your Age: Generally, the younger you are when you take out a policy, the lower your premiums will be. This is because younger individuals are statistically less likely to make a claim.
Your Health: Your current health status is a significant factor. Insurers will typically ask about your medical history and may require a medical examination. Pre-existing health conditions can sometimes increase premiums or, in some cases, affect your eligibility for certain types of cover.
Your Lifestyle: Certain lifestyle choices, such as smoking or engaging in high-risk activities, can increase your premiums due to the higher potential for claims.
The Amount of Coverage: The level of financial protection you choose will directly impact your premiums. Higher coverage amounts will naturally result in higher costs.
The Policy Term: For term-based policies (like term life insurance), the length of the policy will influence the premium. Longer policy terms may come with higher premiums.
The Type of Policy: Different types of protection policies have varying costs. For instance, whole life insurance, which covers you for your entire life, typically has higher premiums than term life insurance, which covers you for a specific period. Similarly, the specific features and benefits included in your income protection or critical illness cover will affect the price. For example, the payout period for income protection can influence the cost.
It's important to remember that while cost is a factor, the most crucial aspect is ensuring you have adequate protection tailored to your individual circumstances. Speaking with an expert advisor can help you navigate these factors and find a policy that balances your needs and budget