Life Insurance

Life Insurance
SMP Healthcare

Life Insurance is also known as Life Cover or Life Assurance and it is a way in which you can protect your loved ones financially if you should die whilst your policy is in place.

Essentially when you take out the policy you choose the amount of cover that you need and how long you need the policy to run for. You can pay the premiums on a monthly or annual basis and in return you and your family know that they could receive a cash sum (either as a lump sum or as regular payments) when you die, if a valid claim is made.

There are two main types of Life Insurance available in the UK:

Term Life Assurance

This type of policy will run for a fixed period of time such as 5, 10 or 25 years. This is referred to as the “term” of your policy. Term life Assurance will only pay out if you die during the policy and there is no lump sum payable at the end of the policy term.

You can apply for Level Term Assurance where you are insured for a specific period of time for a set monthly premium, this does not change throughout the lifetime of the policy.

Whole of Life Policy

A Whole of life Policy will pay out no matter when you die providing you continue to keep up with your premium repayments. This policy covers the life assured from the date the policy starts until they die.

What is the cost of Life Insurance?

The premium you pay for a Life Insurance policy will depend on a number of things including the amount of money you want to cover, the length of the policy term and also your age, health, lifestyle and whether or not you smoke. As a general rule, the premium is lower the younger you are.

Do you need to take out a Life Insurance policy?

If you have dependents who rely on your income or you live in a house which you pay the mortgage on; then a Life Insurance policy may be the best way for you to ensure that you have provided for them in the event of your death. Your children or partner (or both) would then be in a better financial position than being reliant on government assistance alone.

If however you are a single person or your partner earns enough money to be self-sufficient then you may not need to take a Life Insurance policy at all.

You could choose just to cover the outstanding amount on your mortgage to ensure they have one thing less to worry about.



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