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Life Assurance

There are many forms of life assurance, some of which are mentioned in the adjoining pages to this section. Choosing the right one for you can depend upon a number of factors including tax, cost and the protection required.

Life insurance - what it could do for you

Life assurance can be used to protect income, loved ones and businesses and, in certain circumstances, can be arranged in such a way as to minimise the effect of tax.
For example, your partner could use the lump sum to pay off a debt such as a mortgage or use the money to provide an income.

Alternatively, you could take out a separate mortgage protection policy, so the Life insurance money can be spent elsewhere. If you need to ensure that your dependents have an income in the event of your death, you can arrange this as a separate income protection or Family Income Benefit policy. Likewise, you can take critical illness cover as an additional benefit.

Life Insurance - what is it?

Life insurance, or life cover, as it is also known is available in two different forms, from Life Assurance companies. Term Assurance policies pay a tax free lump sum should you die at any time during a fixed policy term. The second type which provides cover for the rest of your life, is known as Whole of Life insurance.

Life insurance - how it works

If you choose a Term Life Assurance policy your dependants will receive a lump sum if you die during the period covered by the policy. With a Family Income Benefit policy your dependants will receive regular monthly income for the remaining term. If you choose a Whole of Life insurance policy, this will pay out a lump sum when you die, at whatever age. The benefits of all three are usually tax free and you can spend the money however you choose. You can pay premiums each month or, if you prefer, annually in advance. The premiums will vary according to how long you want life assurance cover for and other factors such as your age, occupation and medical history.