 |
Choosing the Best Life Insurance
Policy for You
Written by: Claire Bowes
Life insurance in the UK is becoming more and more popular with many
people now realizing the importance and the benefits of a good life
insurance policy. There are two main types of popular life
insurance, both of which offer a range of invaluable benefits to UK
consumers.
Level Term Life Insurance
Level term life insurance is the most popular type of life insurance
policy with UK consumers, and this may be because it is also the
cheapest form of insurance. With level term insurance, you and your
family can enjoy peace of mind at an affordable price. If you die
during the term of this insurance policy, your family will receive a
lump sum payment, which can help to cover a number of costs as well
as provide some degree of financial security at what will inevitably
be a difficult time. The money could assist with costs such as:
 Mortgage
repayments
Funeral
costs
Education
costs for the children
Day-to-day
living
One of the reasons that level term life insurance is a fair bit
cheaper than other life insurance is because the insurer only has to
make a payment if the insured party passes away, and even then the
insured party has to die during the term of the policy for the next
of kin (or the named beneficiary) to be eligible for a payout. One
of the great things about levels term insurance is that you can
benefit from cover for just a few pounds each week, and because the
payments remain the same throughout the term of the policy, you’ll
never have to worry about rising payments.
The reason why a level term insurance policy is so called is because
the repayment remain level throughout the term of the policy, so you
will never have to worry about the cost of your policy rising. The
policy is also taken over a fixed term, which is where the ‘term’
part of the policy comes in. This means that you can enjoy easy
budgeting and low cost repayments, and you’ll know exactly how long
you will be making payment for. On the downside, once the policy
expires you will not be able to reclaim any money and the policy
will be cancelled, so you will then need to look at taking out
alternative life insurance cover.
The average term of a level term life insurance policy – unless
otherwise specified – is fifteen years. There are a variety of
factors that contribute to the cost of the policy such as whether
you go for the most basic package or whether you include a bolt-on
such as critical illness cover, whether you are a smoker, your
general health, and the term over which you take the policy out.
Whole Life Insurance
Unlike level term life insurance, whole life cover offers a
guaranteed payout, which to many people makes it better value for
money in the long run. Although the repayments on this type of cover
are more expensive than level term insurance, the insurer will make
pay out whenever the insured party passes away, so the higher
monthly payments will guarantee a payout at some point.
There are a number of different types of whole life insurance
policies, and consumers can select the one that best fits their
needs and their budget. As with other insurance policies, you can
tailor-make your whole life insurance cover to include additional
cover such as critical illness insurance. The variations on whole
life insurance cover include:
Non-profit UK whole life insurance policies: This is the simplest
form of whole life cover, and enables you to enjoy the convenience
of level payments through the term of the policy until you die. Upon
death, your family received a payout and the policy becomes null and
void. If you want to pay a little extra, you can take out a policy
that is fixed over a specified term, which means that you will only
be making payments for a certain amount of time, but your family
will still receive a payout when you die.
With-profit UK whole life insurance: This is a cover and investment
type scheme, where your monthly payments are split between your
cover premiums and the investment side of your policy. You will
enjoy a guaranteed assured sum, and you may find that your insurer
adds discretionary bonuses. Low cost UK whole life insurance:
One of the cheapest forms of whole life cover, this type of policy
features a decreasing term plan, and the policy is combined with a
profits fund. As bonuses are added to the profit side of the policy,
the policy term decreases. This provides a cost effective solution
for those that want to enjoy the benefits of whole life insurance
cover without having to make high monthly payments.
Unitised UK whole life insurance policy: When you purchase this type
of whole life cover, you will also be investing in with-profit
units. This means that when the insurer makes a payout, the sum
awarded will be dependant upon the value of the units in comparison
to the value of the death benefit (the payout will be based upon
whichever is the highest in value). Each month units are cancelled
in order to increase levels of death benefit cover, with reviews
carried out from time to time to ensure adequate levels of death
benefit cover.
About the Author
Claire Bowes
is a successful freelance writer and owner of
http://www.a1-life-insurance-quotes.co.uk where you will
find further information on her website.
Visit Claire's
website at
http://www.a1-life-insurance-quotes.co.uk. |
|
