|Life insurance is a personal insurance plan
designed to pay out a sum of money on the death of the
policyholder. Life Insurance is an insurance that is taken out
against a persons life. It will pay out either a lump sum or
monthly contributions to the "trustee" or next of kin in the
event of the policy holder's death.
Life insurance is, as the
name implies, an insurance policy taken out on an individual's
life. As with any other insurance policy, regular premiums are
paid by the policyholder to the insurance company - and should
the policyholder die, then the policy will pay out either a lump
sum or a regular income.
People think about the future more now than ever before. We
want a good standard of living not just now but also as we grow
older and this is why the financial services industry has become
The most obvious reason for a life insurance policy is to
provide financial protection for family and loved ones, should
you die unexpectedly. However, there are a number of different
circumstances in which life insurance is an important factor to
consider, such as protecting your mortgage, your estate or your
Upon the death of the policyholder, a life insurance contract
provides a one-off lump sum payment - particularly important if
either you or your family take on a big loan, any long-term
financial commitment, or purchase a house. For example, if the
policyholder does die the payment from a life insurance deal
could be used to pay off a mortgage.
Life Insurance is particularly valuable if taken out at a
younger age, due to the fact that it will cost much less. It
will help you to protect your family against any financial
difficulties that may arise from your death. It can replace lost
income, provide a lump sum towards funeral costs, pay off an
outstanding loan or credit card.
But it is worth remembering that an effective life insurance
policy should provide for both your partner's or your family's
short-term and long-term financial requirements. Short-term
requirements include taxes and funeral costs, while long-term
requirements often range from vital expenses, such as school
tuition for your children or your partner's needs upon
Life insurance comes in many different formats to allow
people to choose the best type of cover for themselves. The
types of life insurance available include:
Mortgage Life Insurance
Designed to pay off your mortgage in the event of your death,
or the death of your partner.
Level Term Life Insurance
Designed to cover fixed repayment loans.
Whole of Life Insurance
Policy continues until the policy holder dies when a lump sum
is paid out. As long as the payments are kept up to date, the
sum assured, which is the level of life insurance cover, will be
paid to your estate.
Family Income Benefit Life Insurance
This form of insurance can provide an income for your family
or a lump sum if you die during the term of the family income
Your personal circumstances will affect the premiums for life
insurance policies, with the most important factors being age
and medical history. Which life insurance company you choose can
also have an impact on the level of premium required as
different life insurance companies treat clients differently.
Life Insurance products have now become very cost effective.
Life cover is so cheap to obtain that you have virtually no
reason not to obtain a policy.
Getting life insurance can be complicated due to the
different types of policies available. If you are unsure about
which life insurance to go for, then you should seek some