Life Insurance – The Basics
Life insurance is really essential if you have children or other dependents that would have to manage without your income if you were to die suddenly. It is not compulsory of course, and single people or those without families or children may well not need life insurance cover, preferring to invest their money in other ways.
Although one might assume that life insurance means simply that, there are actually several different kinds of life insurance that you might wish to consider that would secure your family’s financial future in the event of your death.
The two main types of life insurance are Term Insurance and Permanent Life Insurance. The main difference between these two common types of life insurance is that Term Insurance will pay out a lump sum (the sum assured) if you die within a set period of time, and Whole-of-life or Permanent Insurance will provide a payment whenever your death takes place. If you live beyond the agreed termination time of a simple Term Insurance, then your dependents will receive nothing on the event of your death.
There are other types of life insurance that are linked to savings plans that pay a lump sum upon maturity. Many individuals use these as a form of investment that includes valuable life insurance cover.
Always make sure that insurers are regulated under the FSA before you take out any policies.
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