Important Financial Decisions
For those with dependants and long-term financial commitments, life insurance can be a necessity to ensure that a person's death doesn't result in financial hardship for those who are left behind. However, depending on an individual's circumstances and the level of cover needed, the premiums payable can cause economic strain. With careful planning, it is possible to reduce the overall cost and also ensure that benefits on death are maximised.
If you have critical illness cover, which pays out in the event of contracting a specified illness, as well as life insurance, it may be better to combine the two. A life insurance policy with a critical illness option will generally be cheaper than having separate policies. Bear in mind that many life insurance policies will automatically include terminal illness cover that pays out when any terminal illness is diagnosed.
Whilst life insurance used to be a speciality product offered by banks, now most mainstream providers will offer you such.
Just pay attention to the small print as to who will be underwriting you and possibly even check their offerings direct and cut out the middle man.
The term life insurance is a bit of a misnomer and the product is more properly referred to as life assurance or term assurance. Insurance, after all, is a form of protection against something that may not happen (such as a fire or theft) whereas assurance refers to a certainty, which death still is.
Sticking with the term life insurance, its purpose is to provide a financial sum in the event of the policy holder's death. This may be intended as income replacement, to clear a mortgage, pay ongoing expenses or simply to provide a lump sum. Whatever the purpose, circumstances often change while the insurance is in place and so there are different types of policy to reflect this.