Life insurance and protection products can appear simple on the surface but there is a wide range of different policies with different objectives. It is therefore crucial that you receive the correct advice in order to achieve the right policy with the best possible terms.
Level Term Assurance
This is life assurance which pays out a pre-determined sum upon the death of the policy holder providing it occurs within the policy’s specified term.
Mortgage Protection (Decreasing Term Assurance)
Mortgage protection is normally used in connection with a capital and interest mortgage and the level of the insured cover reduces in line with the reduction in the mortgage debt. Level Term assurance is more likely to be used in connection with an interest only mortgage as the level of cover remains constant as does the mortgage debt. With Term Assurance cover there is no pay-out if the policyholder survives the policy term and the policy simply lapses with no value. This factor makes this type of cover relatively inexpensive.
Whole of Life
Whole of life assurance pays out a lump sum when you die. Unlike term life insurance with a whole of life assurance the policy lasts as long as you live. Whole of life assurance is more expensive than term life insurance because it is guaranteed to pay out and it is also available as a non-investment product. However, non-investment whole of life assurance is more expensive because it is guaranteed to pay out and isn’t dependent on the performance of the funds.
Income cover for sickness pays out a monthly income if the person covered is either unable to work because of an illness or injury or is unable to carry out a number of everyday tasks and meets our definition of incapacitated.
Critical illness is similar to life insurance but rather than paying out a lump sum on your death, it pays out on the diagnosis of one of a number of listed serious illnesses or injuries.
For further details please visit our website for Life Insurance - targeted specifically for Jersey residents: www.insuremylife.je.