Life insurance and critical illness cover explained
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Life insurance can seem a bit morbid, and depressing. After all, in order for it to pay out you have to die and (obviously) you’ll never see a penny of it. That’s one way of looking at it. The other is more positive; it’s as unselfish as an insurance policy can be. By taking out life cover you’re reassuring your loved ones, that if tragedy hits, they won’t be struggling financially.
Life insurance can be used for many things, but commonly it’s used to repay a mortgage and ease day-to-day family living costs. Often it’s combined with critical illness cover.
Let’s clear up the jargon (types of cover).
This is where the cover reduces each year in line with the remaining balance on your mortgage. Upon death funds are released, paying off your mortgage.
Where money from your policy is used to cover your family’s expenses; and it’s your choice how long you would like this cover to last.
Cover increases in line with inflation to protect you from its effects.
The level of cover remains fixed for the term of the policy.
The only type of cover that guarantees a pay-out; you cannot outlive the term – unlike level term, decreasing or mortgage protection insurance.
Okay, is critical illness cover worth it?
Critical illness (CI) cover pays out as a lump sum upon diagnosis of a serious medical condition. Because it only pays out once it cannot be used a salary substitute. The medical conditions covered are pre-determined when you take the policy out.
It’s a personal choice whether to take out a CI policy, dependent on your life circumstances and financial commitments. More often than not, it’s combined with life insurance.
Getting a quote.
There are a few things to think about…
It’s hard to think about, we understand – but you’ll feel a sense of relief when it’s dealt with.
Thank you for taking a moment.
We’d be happy to hear from you.