Whether you’re looking to provide a financial safety net for your loved ones, moving house or a first time buyer looking to arrange your mortgage life insurance – or simply wanting to add some cover to what you’ve already got – you’ll want to make sure you choose the right type of cover and get a great deal too. Money Matters FS Ltd are independent and search the whole of the market on your behalf.
There are all sorts of products that come under the heading of life assurance and a more relevant heading would be ‘Protection’. Below is a list of the various protection products available with a brief explanation of each one.
Level Term Assurance
This is straight forward life cover which pays out a set amount to your estate on death only during the term of the policy as chosen by you.
Decreasing Term Assurance
This is also life cover but it pays out a decreasing amount on death and is usually used to provide cover for a decreasing debt such as a mortgage and because the cost is based on the fact that the cover decreases it is normally cheaper than level term assurance.
This is another name for Decreasing Term Assurance above
Whole of Life insurance
A Whole of Life Assurance plan is designed to run for the whole of the insured person’s life; it does not have an actual term in years. These policies can be used for personal and business situations, and for certain taxation purposes.
Family Income Benefit
Family Income Benefit (FIB) is a form of Decreasing Term Assurance, paying the death benefit in the form of income payments rather than a lump sum. It is a very cost-effective way of providing an income for dependants for a defined period.
Critical Illness insurance is designed to provide a lump sum in the event of the diagnosis of a specified serious illness or disability. There is no need for the policyholder to die for the benefit to be paid neither does the money have to be repaid if they survive the illness. It is very important that you understand which critical illnesses are covered before signing up.
Income Protection Insurance
Previously known as Permanent Health Insurance this is kind of insurance is designed to provide replacement income for people who are working and need continuing income if they are unable to work through long-term disability or illness.
Private Medical Insurance
Private Medical Insurance (PMI) is a pure protection plan designed to provide cover for the cost of private medical treatment, thus eliminating the need to be totally dependent on the NHS.
Written In Trust
Money Matters FS Ltd recommend that a policy should be ‘written in trust’, which is a vehicle that allows one person to provide benefits for another, looked after by a third party.
The benefits of putting a policy in trust are:
- The sum assured is outside the policyholders estate
- The trustees have control of the funds, which means they can ensure the policyholders wishes are met
- The sum assured can be paid to the trustees quickly, without the need for probate or letters of administration