Life Insurance Frequently Asked Questions
What is Life Insurance?
The main purpose of life insurance is to financially protect your dependents if you die. There are two main types - namely Term Insurance and Life Assurance. In short under Term Insurance the policy will pay out a sum if you die during the fixed period of the policy. For Life Assurance policies, there will also be a lump sum payout should you die during the period of the policy however should you survive the period then it will pay out to you. In this way it acts as an investment vehicle but obviously the monthly payments are much higher than Term Insurance.
Do I need it?
The explanation of the types of life insurance suggests the reasons as to why you would require them. Taking that forward you should contact a specialist life insurance advisor who will help you decide the best product for you, based on your current and future requirements.
What do I need to know?
When you purchase Life Insurance, your insurer will usually issue documents such as:
• The Policy Document - sets out in full the terms and conditions of your policy
• The Policy Handbook - contains more details about your insurance
Read and make sure you understand your insurance policy document. If there are insurance terms you are not sure of then check the explanations in the Insurance Glossary
How to choose the right policy for you?
You need to decide how much you would like to pay and what level of cover is right for you. Always get independent advice if you are unsure. Below outlines the different types of cover available:
Term Insurance:
• Payout if you die
• No payout if you survive the term
• Can be taken for the period of your mortgage to relieve dependents of any burden or just for the period when children are financially dependent upon them.
Life Assurance:
• Payout if you die
• There is a payout if you survive the term
• Alternative investment vehicle
Where do you buy your insurance?
Don't buy insurance from your mortgage advisor without comparing costs with other life insurance providers. Make sure you shop around and get at around three to four proposals to ensure you are getting competitive quotes. But don't just look at the price, check what is covered under the policy and check the policy details in terms of exclusions.
AsRecommended can reduce the amount of time and money you spend on comparing quotes by bringing you the UK's leading companies and providing you with all the online links, phone numbers and information you need to get the cheapest quotes.
The opinions expressed are those of the author only. The material is for general information only and does not constitute legal, financial or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation by an FSA authorised company where the market is FSA regulated.