What services do life insurance companies provide?
Everyone is different and has different needs. This means that life insurance companies must provide a range of services in order to suit the majority of people. You'll want to find the right policy that works in your family's best interests and will protect them if you die.
What kinds of life insurance do they provide?
Whole of life cover can be a very reliable service. Your cover is guaranteed to last for the rest of your life, whether that's eight years or eighty. This means that the insurance company has to pay out at some point, making it more expensive than other types of cover (relative to the final payout). Some policies do allow you to stop paying your monthly premiums after a certain point, however.
Level-term cover keeps things simple. You will be able to decide how much you want to pay every month and/or how much you would like to receive. The more you are willing to pay on your premiums, the more your family could receive if you die.
As this is a term-based policy, it will only last for a certain amount of time. This is determined by you when you buy the policy. This will give you peace of mind because you know they will be properly protected if the worst should happen during that time.
With decreasing-term cover , the amount of money your loved ones could receive decreases as the term continues. This could be made to coincide with the outstanding amount on your mortgage decreasing over time, for example. It can also link with childcare costs, because as children become more financially independent they may need less money from your insurance company.
Decreasing term cover usually costs less than other kinds of cover because the amount of money paid out could be smaller.
Remember that with any type of life insurance, you must meet the terms and conditions of the policy before any payout can be made.
What additional services could a life insurance company offer?
As well as life insurance, many companies offer additional safeguards. For example, life insurance alone would not protect you if you become ill. A breadwinner of the family being incapacitated by illness could be as financially devastating, if not more, than if they had died. They may be unable to work and require constant, expensive care.
That's where critical illness cover comes in. It could pay out a substantial lump sum upon the diagnosis of a critical illness that is included in the policy. This could give extra support to your family during a very hard time.
Some policies also offer income protection, which can replace your income for a certain amount of time if you are unable to work. Unlike critical illness cover, you would not need to be incapacitated by a medical condition to receive a payout.
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Tags: insurance, life insurance, whole of life insurance, level term cover, decreasing term cover, mortgage, critical illness cover, family, income protection