Life Insurance

Why do people opt for life insurance policies? Well, the main reason has to be that they want to protect their family after they die. If you support your children, for example, you may want to make sure that they have money when you are no longer here. Of course, the earlier you find a life insurance policy that suits you, the better. Many people find this area confusing. Take a look at our simple guide so that you understand the basics.

Whole of life insurance
Whole of life insurance is a type of coverage package that you pay into on a monthly basis. This kind of contract lasts your entire life. That means that there is no set end-date for your payments. You will have to pay for this policy for as long as you live. Most policies last for a determined period, yet whole of life insurance continues until you die.

Unlike other types of insurance, your family have the guarantee of a pay out when the time comes. When you pass on, your family will get the entire sum of your savings. This aspect of the insurance is what draws many people to it. After all, everyone wants to leave something for their loved ones when they die. The main drawback of this policy is that you will need to keep making payments into your 70's, 80's and 90's. During this time, you might find that your finances are tight.

Term assurance
A term assurance policy is a little different to whole of life insurance. It lasts for a set amount of time. Usually, this period will be around 25-30 years. For that time, you will make regular payments to your insurance company. If you die before the end of your term, your family will get a payout from the insurers. That money could be a massive help if some of your family members are reliant on you for financial support.

If you outlive your term, though, your insurance policy will no longer have a cash value. That means that your family will not get anything when you die. As you may imagine, this form of policy is much cheaper than a whole of life policy. In essence, this system serves to protect the people you love if you die earlier than you expect.

Critical illness insurance
If you become ill and can no longer work, you will receive state benefits. Despite this fact, many people find that they need more money than they get each month. If you want to protect your quality of life, you may want to consider getting a critical illness policy. These policies will pay out if you get a disease that prevents you from working. Be aware that these policies only cover a particular number of illnesses. You need to check the fine print of the contract before you make your decision.

This short guide should help you when you decide what policies you need. Remember, you can't foresee what will happen in the future, and so you have to protect yourself. These systems will help you to have the security you need.