If you’re looking for life insurance products, the market can appear complicated. There is a wide range of different types of cover to protect your family in the event of death or illness. However, you need to consider what types of cover you should be investing in, in order to protect your family if anything happens to you. They are:
Mortgage Protection Insurance
If you own your own home, it’s probably a condition of your mortgage that you have some type of life insurance to pay off the debt if you die. The most common type of policy is decreasing term life insurance. This will cover you for a set term, usually the same as the length of the mortgage and the amount of cover you receive will decrease as you pay off the debt. In the event of your death, a lump sum will be paid to cover the remaining mortgage. As the level of cover reduces over time, the monthly premiums will be lower than if you took out a level term policy. With this, your pay-out remains the same for the duration of the policy.
Critical Illness Cover
If you’re worried about protecting your family should you contract a serious illness, you should consider taking out this type of policy. Depending on the insurance provider, the policy will pay out a lump sum if you are diagnosed with certain illnesses. The illnesses that are covered will vary from company to company, so it’s important that you check the small print before committing to anything. The length and level of the policy can differ depending on your needs, but it will reduce the financial pressures if you have to suddenly stop work. These types of policies cannot be started if you have already been diagnosed. However, there might be other products available depending on your illness, such as HIV life insurance.
Income Protection Insurance
This is a key type of cover if you’re the main earner in your family. However, it’s often overlooked in favour of critical illness cover. These policies will help to cover a percentage of your income if you are off sick for a considerable period of time. The length of time you have to wait before claiming and the total period you can claim for can vary depending on your individual circumstances.
Buying the right type of life insurance for your family’s needs is vitally important. The last thing that you want to be worried about if something happens is how you will manage financially.
This is a guest post by Robert Bell, He writes articles and blogs about Family Income Benefit on on behalf of Life Broker.
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