LIFE INSURANCE AND CRITICAL ILLNESS

Life Assurance - Protection- Protection policies will insure against something happening within a given period known as the term and will pay out either an income or a pre-determined capital amount should the specified event occur during the term of the policy. For example you may take out a term assurance policy to provide a family with protection against the death of the principal breadwinner while the children are still young. If the breadwinner dies within the specified period, a lump sum is paid to the family. If the breadwinner survives then the policy becomes worthless and the family receives nothing.

Level Term Assurance (LTA) - Provides a lump sum on the death of the life or lives assured. If no death occurs in the term, then the policies simply lapse, with no value.

Decreasing Term Assurance (DTA) - Designed to provide for the repayment of any outstanding loan on a repayment mortgage. The payout will normally be made on the death of one of the mortgagees. There is no value to the policy once the mortgage has been repaid.

Permanent Health Insurance (PHI) - Provides an income if the insured is unable to work because of illness or accident. Normally, there is a deferred period before the income is paid and the longer the deferment, the lower the premiums. If the insured becomes permanently disabled then income will be paid, though the definition of disabled varies from company to company, and may or may not be restricted to the ability to carry on the previous trade or profession. Payments may be restricted to 75% of previous earnings and any state benefits will be taken into account. Following the 1995 Budget, there are tax concessions on the income from such schemes.

Critical Illness Cover (CIC) - Many people who suffer life threatening illness survive for relatively long periods due to the advances in medical care. Many people worry about the effects of a critical illness on the family's ability to maintain the lifestyle they have worked hard for. Critical Illness is a protection policy which provides a lump sum (sum assured) on diagnosis of one of a specified list of illnesses, or on the permanent total disability of the life assured. We can help you to choose the best company that covers the conditions that are of the greatest worry to you.