 |
 |
 |
 |
|
The following terms are explained on this page :
Term Assurance Mortgage Protection Critical Illness Cover Combined Term Assurance and Critical Illness Cover Waiver of Premiums Option |
| Term Assurance and Mortgage Protection Insurance |
|
Term Assurance is the simplest sort of life cover available. It pays
out an agreed sum (the sum assured)
if you die before the end of the policy (the
term). It could also be called death insurance!
|
| Critical Illness Insurance |
| Critical Illness Insurance
is also arranged for a fixed term, but unlike term assurance it is designed
to pay out when you are diagnosed
with one of a number of specified critical illnesses (e.g. Cancer, Stroke,
Heart Attack, Kidney Failure, etc). Today, we are far more likely to survive illnesses that may have killed us in previous generations. But although we may survive a critical illness like heart attack the recovery period is usually long. Often it is not possible to return to work full-time (or sometimes even at all) after such an illness, but the mortgage and other bills still need to be paid. That is where Critical Illness cover comes in. It pays out a lump sum when you are diagnosed. You can use this lump sum to pay off the mortgage, to pay medical expenses, to invest to provide an income in the future, or for any other purpose. Knowing that the mortgage is paid off for example would greatly reduce the financial stress when recuperating from a critical illness, and avoid the need to go back to work before you were fully recovered. The policy can cover either one person, or two people jointly. In the case of a "joint life" policy it pays out when the first person covered (lives assured) is diagnosed with a critical illness. As soon as the policy has paid out, or if the end of the policy term is reached, the policy ceases. (You should also consider Permanent Health Insurance which pays out a regular monthly income in the event that you are unable to work for a prolonged period as a result of illness). The policy has no "cash in" value at any time. Cover is more expensive than Term Assurance because the probability of suffering a critical illness is higher than the probability of death during the policy term. It is still a simple policy to arrange and administer, and cover from different insurers can be easily compared on price. Term Assurance is protection for your dependants, but Critical Illness Cover is protection for you. Even if you have no dependants you should consider Critical Illness Cover - who will pay your mortgage and other bills if you cannot work as a result of a heart attack for instance? Critical Illness Cover is offered in the same variations as Term Assurance :
|
| Combined Policies |
| Combined Critical Illness &
Term Insurance policies offer cover against both critical illness
and death in the same policy. The policy will pay out if you either die during the policy term, or you are diagnosed with a specified critical illness during the policy term. This offers a high level of protection for you and your dependants. The policy can cover either one person, or two people jointly. In the case of a "joint life" policy it pays out when the first person covered (lives assured) is diagnosed with a critical illness or dies. As soon as the policy has paid out, or if the end of the policy term is reached, the policy ceases. It will not pay out twice - it will pay out on either death OR critical illness, not both. The policy has no "cash in" value at any time. Cover is more expensive than both Term Assurance or Critical Illness Cover because it offers a higher level of protection and a higher probability of paying out than either policy individually. It is still a simple policy to arrange and administer, and cover from different insurers can be easily compared on price. Combined Policies are offered in the same variations as Term Assurance and Critical Illness Cover :
|
| Waiver of Premium |
| "Waiver of Premium"
option means that the insurer will take over the premium payments on your
behalf 6 months after you become unable to work through accident or illness.
This means that cover continues free of charge during extended periods
of disability. The waiver of premium claim stops when you are assessed
as fit to return to work. Waiver of premium is recommended since it protects you against the possibility that your insurance cover may lapse during a long period of illness. If this illness is followed by death then it means that the cover was lost at the very time it was needed! Waiver of premium generally adds around 3% to the premium (per life assured). |