Life Protection

There are several ways in which to protect yourself and your family in the event of an untimely death. Most people take out life insurance to provide for their families and alleviate any financial worries at a difficult time.

Term Assurance pays a lump sum in the event of death during the term of the policy. There is no investment element within a term assurance contract so at the end of the term there is no maturity value and life cover lapses. The benefit is paid tax-free and premiums are usually monthly, and fixed throughout the term. Because the term and benefit are known from outset and there is no investment content, term assurance is a very cost-effective method of protection.

Decreasing Term Assurance works exactly as above, but the benefit is set at outset and gradually decreases over the term of the policy. These policies can be used to protect a repayment mortgage, or other loan where the amount of capital outstanding also decreases over time. Because the benefit reduces over time, the premiums are kept relatively low.

Family Income Benefit works the same as term assurance but instead of paying a lump sum upon death, it will pay a regular (usually monthly) tax-free income in the event of death to your dependants up until the end of the term of the policy.

Critical Illness is usually available as an addition to all term assurance plans but can be bought on a stand-alone basis. Critical illness generally allows for the lump sum benefit to be paid in the event of diagnosis of certain 'dread diseases', such as Heart Attack, Stroke, Transplant, Blindness, Total & Permanent Disability. Most providers conform to the Association of British Insurers standards for qualifying illnesses and it is important that you fully understand the terms of each illness. Critical Illness can be provided on either a guaranteed or reviewable premium basis.

Whole Life (Life and/or Critical Illness) is the 'comprehensive' version of providing protection. As long as the policy-holder's premiums are up to date, the life assured is guaranteed a pay-out on death or upon diagnosis of an insured 'dread disease'. As the underwriter knows he is certain to have to pay-out (subject to there being no breach of contract), the premiums are relatively high. On the other hand, as the insured party knows their estate is going to receive a pay-out many believe that this type of cover represents the best long term value for money (subject to affordability).

For an informal chat about your requirements please call 01223 846726 or email info@downingfinancial.co.uk