Alternative life assurance policy options

Life assurance, as its known in the UK, should be given careful consideration especially if you have dependants. Term life assurance is the most popular type of life assurance however there are other types you should be aware of that you find better suit your circumstances or wishes.

The other types of life assurance

Whole-of-life policies are offered by most insurance companies. As you have probably guessed they pay the sum that has been assured on the death of the person insured, regardless of when it happens.

Normally you will pay premiums until you reach a certain age, probably around 75 years, however your cover will continue until death. They are however more expensive than term insurance because the life assurance company will have to eventually pay out on the policy.

This life assurance policy will normally be offered in different cover options from minimum to maximum cover. What you choose will depend on how much is invested in the investment fund by the assurance company. With maximum cover the deduction will be much larger and premiums will likely rise to ensure cover is maintained for the life assurance policy.

With-profits policies

Final option is with-profits policies which will guarantee a minimum amount payout of life assurance cover if you do die but each year the sum will increase by the addition of annual bonuses. There are further bonuses usually added when the insured person dies which will increase the final payment further for the recipient.

There are also universal policies available which will work in the same way as the unit linked whole of life assurance policy. Every month the units are uncashed which will pay for the life assurance cover. However there are a wide range of benefits that come with these policies which include disability benefit. This will mean should the person become permanently disabled they will receive the sum that has been assured. Other benefits include fatal accident benefit, critical illness cover as well as the option to waiver the premium which will ensure that your payments are made should you find yourself unable to work. The latter will be of particular use in our current economic climate.