Nobody likes to think they may be too ill to work and pay bills, or leave a family behind, struggling financially after a death. Yet it's a fact of life that things like this happen whether we're prepared for them or not. While you can't cover all contingencies, there are steps you can take to aid peace of mind, both for yourself and your family.
I'm talking about insurance. We insure everything nowadays; the car, the house, even the dog. So why not insure yourself too? It can be a great comfort knowing that whatever happens, your family will be provided for.
There are different forms of personal insurance; Life, Family Income Benefit, Critical Illness and Income Protection. All have different criteria for claims, and cover you for different things.
Life insurance is probably the simplest, and pays out a lump sum on the death of the policy holder. You can either take out a policy which covers you for life, or for just a set length of time (term insurance). With a term assurance policy, also called level term, the amount paid out is the same whenever a claim is made. A decreasing term policy amount lessens each year, eventually dwindling to nothing if no claim is made.
Family Income Benefit is usually taken out for a set period, such as 15 years. If a claim is made in the 5th year, the insurers will pay the income equivalent for the remaining ten. The principle is that if a death occurs, the policy holder's dependents won't have to manage without that income during the worst time. This type of policy is best for those with high-risk occupations or hobbies who have a young family.
Critical Illness pays out a tax-free lump sum on diagnosis of certain debilitating and/or life-threatening illnesses. All insurers must cover Cancer, Strokes, Heart Attacks, MS, Kidney Failure, Coronary Bypasses and major organ transplants, and many will cover other illnesses such as Diabetes, Arthritis, Alzheimer's and most other debilitating conditions. Check with the insurer before taking out the policy to see any exclusions.
Income Protection can cover up to 70% of your income if you are unable to work. Available as either a whole life policy, or a set term, it is one of the most expensive types of cover as it could, theoretically, cover you for most of your working life. This said however, it's not as expensive as people would think; to cover an income of £12,500 per year could cost just £20 per month. Think of it as the insurer paying your salary instead of an employer if you are unable to work.
Whichever type of policy, or even a combination, that you decide on, make sure you disclose
all information from your medical records, however irrelevant you think it may be. Insurers won't check your records when you take out a policy, but they will go through it with a fine-toothed comb if you claim; searching for a reason not to pay out. Don't let them find one.
You can combine any of these with a
life insurance policy. Don't leave your family unprotected, take out
life assurance today. Shop online for
life insurance quotes.
