What types of life insurance are available?
There are a variety of different life insurance policies each with different features that suit people in different circumstance It is important to make sure that you understand the various options available to you. Life insurance is an important investment for your family’s financial security, therefore you should put some thought into what you might need to protect your family.
Term life insurance: This type of policy pays out in the event of your death within a specific agreed time period. This can be useful if you’re looking to covering expenses whilst your children remain young, but perhaps minimising the cost by having the policy expire when they’re a little older.
When taking a term life insurance policy, one concern you might have is that you then have to apply for a new policy when it finishes. Your higher age and any medical conditions that may have evolved since you first took out a policy, could mean that your premiums are higher when you need a new policy. But at the same time you could then consider an over 50s Life insurance policy. In some circumstances you might be able to extend your existing policy but that will depends on your insurer.
Decreasing term insurance: The most affordable life insurance premium is likely to be decreasing term insurance; this is often referred to as mortgage life insurance as the lump sum paid out decreases over time in line with (but not linked too) your outstanding mortgage balance. As the amount paid out decreases over time the monthly premiums are often lower than that of a policy where the claim pay-out doesn’t decrease.
Deceasing term insurance would pay out if you passed away, which would allow your loved ones to cover the mortgage and potentially clear outstanding debts that you might leave behind.