Protection

The terms life insurance and life assurance are often interchangeable and both often known simply as ‘life cover’. People often ask what the difference is, so here’s how it works: Life insurance is cover you take out for a set number of years. You agree the term of the policy at the outset, usually between 10 and 25 years. That’s why you’ll often find this type of policy referred to as term insurance. Most people tailor their policy to ensure that their financial commitments would be met in the event of their death, so policies are often aligned with the term of a mortgage or other loan. Banks and building societies usually require some form of life insurance as a condition of granting a mortgage.

The plan will have no cash in value at any time and cease at the end of the term. If premiums are not maintained, then cover will lapse.

What it does – This type of policy pays a monthly income tax- free if you are unable to work due to an illness or injury. How it works – The monthly income under the policy will be between 50 and 70 per cent of your salary and will be paid until you are fit enough to return to work or reach retirement age. yield or capital growth, property has proved a good investment at a time when returns on other types of asset have been comparatively low.

The plan will have no cash in value at any time and cease at the end of the term. If premiums are not maintained, then cover will lapse.

What it does – Critical illness cover pays out a tax-free lump sum if you are diagnosed with a major illness, including cancer and heart disease. Actual illnesses covered in a policy may vary between providers. How it works – Many insurers will make a part payment on an early-stage diagnosis of a condition specified in the policy, the percentage will vary from company to company.

The plan will have no cash in value at any time and cease at the end of the term. If premiums are not maintained, then cover will lapse. The policy may not cover all the definitions of a critical illness. For definitions please refer to the key features and policy document.

What it does – Family income benefit policies work in a similar way to ordinary life cover, but instead of a lump sum, the policy pays out a regular income if you die. How it works – A typical policy might be taken out by the parents of young children, so that if one parent were to die during the term of the policy, then an income would be paid out for a predetermined period of time. So, if you had a 20-year policy and were to die five years into it, then the policy would payout a regular income for the remaining 15 years.

The plan will have no cash in value at any time and cease at the end of the term. If premiums are not maintained, then cover will lapse.

What it does – This policy provides cover so that if you are unable to work because you’re injured or sick, or through no fault of your own, you have lost your job. How it works – In the event of a claim, you will receive a predetermined percentage of your monthly income, usually for a period of up to 12 months. Payments are made after a waiting period of at least a month. If you choose a longer waiting period, your premiums are likely to be lower.

The plan will have no cash in value at any time and cease at the end of the term. If premiums are not maintained, then cover will lapse.

What it does – Private medical insurance means that you can get access to diagnosis and treatment faster and therefore are more likely to recover quicker. Policies cover the costs of private medical care including seeing consultants and specialists, treatment, surgery, private hospital accommodation and nursing costs. How it works – You will need to decide what level of cover you want for yourself and your family, as this will determine what your premiums will cost. You can choose the level of excess, that’s the amount of any claim you are happy to pay yourself. Paying a higher excess will generally bring the cost of premiums down.*

The plan will have no cash in value at any time and cease at the end of the term. If premiums are not maintained, then cover will lapse.

This type of policy covers the bricks and mortar and permanent fixtures of your home. So, if it’s damaged as a result of events like storms and floods, fire, vandalism or water damage from leaking pipes, your policy will cover the cost of repairs to your property. The amount of buildings insurance you need should represent the cost to rebuild your home, not its full market value which can often be a lot higher. Your adviser will be able to help you calculate the right level of cover for a property of your type, size and construction.

The plan will have no cash in value at any time and cease at the end of the term. If premiums are not maintained, then cover will lapse.

Contents insurance policies are designed to cover your possessions from loss, damage or theft. Insurers define ‘contents’ as all those things that you’d take with you if you moved house. So, most policies include things like furniture, carpets, curtains, electrical goods, clothes and valuables such as watches and jewellery. The cover available falls into two types: ‘new for old’ policies which means that, if for instance, something is stolen then the payout will be enough to buy an equivalent new item. Indemnity policies, which are often cheaper, payout a reduced amount if you make a claim as they take into account the wear and tear or the depreciation in the value of an item. So, if you lost something you’d owned for a while, you would get back the current value, not what it would cost to buy new.

The plan will have no cash in value at any time and cease at the end of the term. If premiums are not maintained, then cover will lapse.