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Life Assurance
By: Gary Tallon
Planning for your future life can seem like a time consuming burden when you
have a young family. After all, where do you find the time in your life to think
about things like life assurance while you're struggling to keep work and home
life pressures in check? Our departure from this life though cannot be
predicted. You and your partner may live a good life to a ripe old age, or you
could pass away tomorrow. If the worst were to happen to you, where would that
leave your partner and your dependants? Would they be financially secure for the
rest of their life after their loss and not have to worry about paying the
mortgage? If not, then a life assurance policy is a must.
Life assurance for life and death
Life assurance, also known as life insurance, is an assurance policy that pays
out a lump sum to a named person(s) in the event of your death. This type of
assurance policy is inexpensive to maintain, assurance premiums being very low
if you take up the assurance policy early in life. Depending on the nature of
the assurance policy you may pay assurance premiums up until the end of your
life or up until a specified age.
You can also format your assurance policy as a single life policy or as a joint
life policy. For married couples with a mortgage and/or dependants, a joint life
policy is often the preferred type of assurance to opt for as the assurance
policy has the flexibility to pay out on first death or second death. An
assurance policy that pays out on first death is beneficial for those carrying a
mortgage and where the deceased's life partner and/or dependants are still
alive.
Types of life assurance policies
When considering buying into a life policy you'll find three basic types of
assurance policy available from assurance companies - term assurance, family
income assurance and whole life assurance.
Term assurance - Term assurance is a straightforward life policy that pays out a
tax-free lump sum upon your death. This is a basic life policy that runs to a
specified term, often coinciding with the life of a mortgage.
Family income assurance - This life policy is a set term assurance policy that
pays out to dependants should you die during the term of the assurance policy.
Pay out is on a regular basis (like an income) until full term of the assurance
is reached.
Whole life policy assurance - This is an open-ended assurance policy that pays
out a lump sum upon your death, regardless of when you depart this life.
About the Author:
Gary Tallon is a finance writer of over ten years experience and is currently
working in the life insurance sector with Insurance Shop.com.
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