Life Insurance

It’s a little strange thinking about what would happen if you suddenly passed away.

But one thing’s for sure, whoever you leave behind – children or grandchildren, a partner, parents, brothers and sisters, colleagues or friends – somehow, eventually life goes on. Arranging life cover can give you peace of mind, knowing that your dependants will be looked after financially should the worst happen to you, with either a lump sum payment or a regular income.

In a nutshell, the main types of life insurance are;

Term assurance (referred to as ‘protection only’)

Term life assurance pays out if you die within a pre-determined period of time (the 'term'). However, If you survive the term, it pays out nothing. Term assurance is often the cheapest way to buy the level of cover you need to protect your family, or other dependants in case you die.

Term insurance isn’t an investment, so it doesn’t build up a cash value

Investment-type

As well as paying out on death, ‘investment-type’ policies should build up an investment value, which can be cashed in during your lifetime. Examples of these policies include:

• Whole of Life – this guarantees a lump sum payout when the policyholder dies, whenever this may be. As long as the policy premiums are maintained, the life cover is guaranteed
• Endowment – these policies are essentially a savings scheme, with life assurance attached.

A common example is an endowment policy used in association with a mortgage. At the end of the policy term, the policy pays out any accumulated returns or if the policyholder dies before the term has ended, there would be a lump sum payout plus any accumulated returns up until the death.

Life insurance policies typically cover the following:

• Death of the life assured.
• Terminal illness affecting the life assured.
• Critical illness affecting the life assured.
• Ill health or injury of the life assured.

Life insurance policies tend to have a variety of common exclusions - such as pre-existing medical conditions, age restrictions, occupational or dangerous pastimes, certain illnesses and diseases, and unusually large sums assured.

To discuss what level of cover is right for you book an appointment with a Legal & General Financial Adviser at a local Bradford & Bingley branch – they’ll be able to provide a solution that is tailored to your exact needs.