We all need to consider protection. What would happen if a sudden illness, disability or death occurred?
Life Cover – This comes in two forms: Level Term Assurance or Decreasing Term Assurance. Level Term Assurance will give you the same amount of cover throughout the life of the policy and pay out on the death of the life assured. Decreasing Term Assurance will decrease over the term, usually to match your decreasing mortgage amount, and pay out the current amount on the death of the life assured.
Critical Illness Cover – To cover you and your family against the financial impact of a critical or serious illness. This cover pays out a lump sum should you be diagnosed with a critical or serious illness. Illnesses covered vary depending on the provider and type of policy.
Family Income Benefit – These policies are designed to pay out a regular income on diagnosis of a specified critical illness or a regular pay out to your family if you were to die. If this seems more appealing rather than a lump sum, you can choose family income benefit.
An example would be if you took out a 25 year policy and in the event you were diagnosed with a specified critical illness or died after 12 years: the policy would not pay out a lump sum but would instead pay an annual or monthly income to your family for the remaining 13 years of the policy term.