In the third of a series of articles about choosing the right life insurance, it is considered whether the right cover for you could be term assurance in Essex.
Put simply, with a policy of term assurance in Essex, you choose the amount you want to be insured for and the period for which you want cover. It is the most basic type of life insurance. If you die within the term that you are covered, the policy pays out to your beneficiaries. However, of course, if you do not die during the term, the policy does not pay out and the premiums you have paid are not returned to you.
There are two main types of term assurance that you may like to consider based upon your specific circumstances –
(a) A Level-Term Assurance Policy pays out a lump sum if you die within the specified term. The amount you are covered for remains level throughout the term, hence the name. The monthly or annual premiums you pay usually stay the same too. Therefore, level-term policies can be a good option for family protection, where you want to
leave a lump sum that your family can invest to live on after you have passed away. Level-term assurance policies can also be a good option if you need a specified amount of cover for a certain length of time, for example, to cover an interest-only mortgage that’s not covered by an endowment policy.
(b) A Decreasing-Term Assurance Policy means the amount that will be paid out decreases over the term of the policy. These policies are often used to cover a debt that reduces over time, such as a repayment mortgage. The premiums to be paid for this cover are usually cheaper than for level-term cover as the amount insured reduces as time goes on. In addition, decreasing-term assurance policies can also be used for Inheritance Tax planning purposes.
(c) Finally, Family Income Benefit Life Assurance is also a type of decreasing term policy. However, instead of a lump sum, it pays out a regular income to your beneficiaries until the policy’s expiry date if you die. Therefore, you could arrange for the same amount of your take-home income to be paid out to your family if you die.
For more information about the value of term assurance in Essex as a means of protecting your family’s best interests, contact our dedicated Essex-based staff at Andrew Douglas Wills and Legal Services now via www.andrewdouglaswills.co.uk or on:
01376 348 997
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