Guide to Life Insurance

Life insurance can seem complicated and bewildering to the uninitiated, but in reality it is relatively straightforward. The most common type of life insurance used by people is term assurance. In selecting a life insurance plan there are a number of considerations to take into account including:

• Whether or not they want the life insurance policy to last for a fixed term (Term Assurance) or for the rest of their life (whole life assurance)
• Whether the extent of the cover of the policy (sum assured) will remain fixed at a certain level or will it change e.g in line with mortgage repayments (decreasing term assurance)
• Is the policy to be on a single life basis or a joint life basis with payment made on first death or second death.
• Whether, in the event of the policyholder’s death, the payment made to the family is made in one lump sum or in staggered payments (family income benefit)
• Is the policy to be placed in trust – this may be more of a consideration for people who are concerned about inheritance tax.
• Are life insurance premiums to be guaranteed or reviewable?

These considerations are extremely important and can be explored further in our guide to life insurance.