No one can deny the fact that life has become extremely uncertain these days. The statistics also reveal this gory truth. There is a huge upsurge in road accidents in the UK in the last ten years. What is even more depressing is the fact that most of these accidents proved to be fatal. This is expected. Life today is lived at a furious pace. Everyone is in a hurry to reach his destination. It is this urgency to reach the destination at the earliest that makes people flaunt traffic signal with disastrous consequences.
Such fatalities are worse in best of conditions. Imagine then the plight of families whose only family member has died in a road accident. Apart from the obvious trauma that a family faces on the sudden demise of one of its members, it also faces the financial problem for the only earning member of the family has expired. It is in such hours of extreme calamity that life insurance proves its relevance and ensures that family members don't have to suffer on financial grounds.
However, to gain maximum from life insurance, one has to make sure of certain points. First of all, one should ensure that the policy comes to life as soon as it is signed. Secondly, one should also give a very careful reading to the agreement and get any wrong information fixed then and there. One should also take extreme precaution of not furnishing any wrong information to the insurance company, for it might lead to the cancellation of the policy.
If the above mentioned precautions are taken and a thorough attention is paid while opting for life insurance, then there is no reason why one's decision of opting for Life Insurance would not prove to be a worthy decision. If approached properly, then it can prove to be one's best bet against calamity as serious as the sudden demise of the only earning member of the family.
I am a cautious person - pension contributions, mortgage payments and national insurance contributions have become an accepted part of my life. I invest in these in the hope that they will make life comfortable for me when it is time to retire. Until now Life Insurance seemed like a scary and somewhat morbid thing to consider. I have decided to challenge my reservations and investigate the types of cover available if you want to prepare for the worst.
The first distinction to make is between life insurance and life assurance. Although these terms are often used interchangeably there is a difference: Insurance generally refers to an event that might happen whereas assurance refers to something that will happen.
Using this definition life insurance would generally cover accidental death whereas life assurance would cover for when the policy holder dies at the end of their life. However, most companies do not make such an explicit distinction between the two. It is of course important that you make it clear what type of cover you are looking for.
Life Level Term
Life level term insurance provides the policy holder with a rate of cover that stays the same throughout the policy. The policy holder can decide on the number of years and the level of cover they require at the outset of the policy. The policy can be set up as a single life plan in which the sum of money that has been insured is paid out if the insured person dies before the end date of the policy.
Alternatively a joint life first death policy can be arranged. This is where two people are insured with the sum insured being paid out after the death of one of the insured.
People taking out this type of insurance can benefit from Critical Illness cover which means the sum insured is paid out upon the diagnosis of a critical illness. To include critical illness cover the policy holder will have to pay an additional premium. If the insured person survives the length of the policy then no money is paid out.
Mortgage Life Insurance
Mortgage life insurance is designed to cover the costs of a mortgage in the event of the death of a key breadwinner. It is a popular option for a family as it pays the outstanding balance of the mortgage in a lump sum if the insured dies before the end of the policy. As the insured is insuring to cover the cost of the mortgage the policy costs reduce over time as you repay more of your mortgage.
Mortgage life lnsurance can also be taken out in a single life plan or a joint life first death basis. In the latter the mortgage will be paid off in the event of one of the insured dying. This is where the policy finishes - nothing is paid out on the death of the second insured.
This also provides the option of taking out critical illness cover for the cost of an added premium. Critical illness cover will pay out if the insured is diagnosed with a critical illness. If the insured survives beyond the policy end date then nothing is paid out.
Critical Illness Insurance
CII pays out if the insures is diagnosed with a critical illness within the dates of the Insurance policy. The amount of money covered by the policy can be decided at the outset as can the duration of the policy. It is available as a single life basis or a joint life basis. The policy can stand alone but it is often added to a life level term Insurance policy or a mortgage life insurance policy for the cost of an added premium. If the insured survives the length of the policy then the sum insured is not paid out.
There are a number of companies that help you find the right policy for you by cross checking a number of different insurance companies for quotes.
Both Allan Elvin & Shaun Parker are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Allan Elvin has sinced written about articles on various topics from Auto Insurance, Insurance and Commercial Photographer. Allan Elvin is an MBA in Finance and has a rich experience of writing on topics related to finance. He professes special interest and expertise in and in. Allan Elvin's top article generates over 450000 views. to your Favourites.
Shaun Parker has sinced written about articles on various topics from Online Marketing, Auto Insurance and Wedding Bells. Shaun Parker is an expert on and life insurance quotes. For a low cost quote and general information visit The Idol.. Shaun Parker's top article generates over 246000 views. to your Favourites.