Life Insurance and Income Protection

A Life insurance policy will pay your dependents a lump sum or regular payments if you die unexpectedly. If you have a partner or children, life insurance can provide you with the reassurance that they will be able to cope financially without you.

You might consider Critical illness cover, which will cover you in case you get a specific type of life changing condition. Payment protection insurance will support you if illness or redundancy means you can’t meet regular payments of your debts.

Income protection insurance is designed to support you financially if you can’t work due to illness or injury and your income drops. This type of policy is particularly relevant for anyone who is self-employed and wouldn’t get sick pay. You might consider getting short-term Income protection insurance. This type of policy will pay out a monthly sum, for a set period of time, if you lose your source of income due to illness, accident, injury or redundancy.

Life Insurance is a protection product which helps to provide financial security and cover to your dependents, family and loved one’s in the unfortunate event of death. The said money that is paid out as a claim from the policy, can be very useful to the dependents to continue the lifestyle they are used to. The funds received can replace a loss of income and could be used to pay off debts like Mortgages, which can reduce a huge financial burden.

Short Term Income Protection cover pays out if you are unable to work due to illness or injury, however it will not pay out in the case of redundancy. The primary difference between an Income protection insurance policy and Critical Illness Insurance policy is the amount and frequency of pay out.

In an Income protection claim the pay out is periodic and generally a percentage of earnings usually 60% to 70% paid out on monthly basis and the said payment are exempt from tax, as compared to Critical Illness claim which makes a one-time lump sum pay out.

The policy holder will have to pay a monthly premium for the duration of the policy term, the amount of premium to be paid is dependent on several factors like age, health and lifestyle.

Term assurance is a cover where there is a fixed term to the policy and if the policy holder were to die within the term of the policy, then the claim would pay out to the beneficiaries. However, if the policy holder survives beyond the set fixed term, the policy would lapse at the end of the term and there wouldn’t be any pay out.