Life Insurance questions & answers

Life Insurance is a policy that pays out a lump sum of money if you die during the term of the policy.

The money can be used to help support your family financially with things such as paying off your mortgage, paying for your funeral or just to cover living costs for a while.

You can choose how much cover you want and how long you want to be covered for. The amount of cover can be a fixed sum for the term of the policy or it can be a decreasing sum to reduce alongside your mortgage balance.

The premiums for Life Insurance are calculated using your age, amount of cover, term of the policy and your health status. Policies can be tailored to your budget.

Critical Illness Insurance is a policy that will provide you with a lump sum of money if you are diagnosed with certain specified illnesses or disabilities

The money the policy pays out can be used for anything you need it for such as paying off the mortgage or covering living expenses if you need to take time off work for treatment.

The most common conditions that critical illness policies payout for are Cancer, Heart Attacks and Strokes. More than 1 in 2 people born after 1960 will be diagnosed with some form of cancer during their lifetime.

Most insurers will include an element of critical illness cover for your dependent children automatically and free of charge.

The amount of cover can be a fixed sum for the term of the policy or it can be a decreasing sum to reduce alongside your mortgage balance.

The premiums for Critical Illness Insurance are calculated using your age, amount of cover, term of the policy and your health status. Policies can be tailored to your budget.

This is a Life Insurance policy that has no end date unlike Life Insurance policies, therefore, as long as the monthly premiums are paid then you will always be covered.

This means that this policy is will provide a guaranteed payout when you die at any age. As a result of this, Whole of Life Insurance is typically more expensive than Life Insurance.

The premiums for Whole of Life are calculated using your age, amount of cover and your health status. Policies can be tailored to your budget.

Also known as FIB, this type of life insurance provides a monthly tax-free income to the family if the policy holder dies during the term of the policy.

The monthly income is paid for the remainder of the policy term. For example Mr X takes out a Family Income benefit to provide £5,000 tax free per month over a 25 year term. Mr X dies 20 years later so the FIB policy has a remaining term of 5 years, therefore the policy will pay Mr X's family £5,000 per month for the remaining 5 years of the policy term - this would provide a total income benefit of £300,000.

Family Income Benefit can be a cheaper way of arranging Life Insurance compared to a level term life insurance policy, this is because the potential value of the payout decreases over the term of the policy.

The premiums for Family Income Benefit are calculated using your age, amount of cover, term of the policy and your health status. Policies can be tailored to your budget.

Income Protection Insurance is an insurance policy that will provide a monthly tax-free income to help you cover your living costs if you are not able to work for a period of time due to an injury or illness.

The policy will begin to payout after a predetermined deferment period of being unable to work (e.g. 1, 3, 6 or 12 months) and will continue to payout until either you can return to work or until the policy term ends.

The premiums for Income Protection Insurance are calculated using your age, amount of cover, term of the policy, occupation, deferment period and your health status. Policies can be tailored to your budget.