UK Life Insurance Information

Below is a glossary of some of the terms assocaited with Life Insurance and Protection.

Level Term Assurance

A lump sum is paid out on the death of the policy holder if that death occurs before the policy comes to an end. This is the most basic type of policy and operates a fixed monthly payment and guarantees for a fixed period or term.

Decreasing Term Life Insurance & Mortgage Protection Insurance

This policy operates differently to the one above as it reduces the level of cover over the lifetime of the policy. Although the policy holder pays a fixed monthly amount. The policy is often bought in conjunction with a repayment mortgage, as the outstanding mortgage amount reduces so does the sum assured, thus reducing the cost of the policy making it a cheaper option against the Level Term Assurance.

Critical Illness Insurance

This can be the one insurance that you wished you had bought! It is an expense that you can ill afford when you are young and healthy and when cancers, heart disease and strokes seem a world away. However, with statistic showing that one in three of us is likely to get cancer, it is an expense that can, for those with a critical illness policy, really make it worth while. Once you have had a health scare or reach a certain age, this type of insurance is much harder to get. With many more people surviving a terrible illness like cancer, when the payout can be quite large, the policy holder can at least rely on the money to provide them and their dependents with financial security.

Convertible Term Assurance

These are assurance plans that have an option to convert to another type of life assurance. They would need to be offered by the same assurance provider without needing further medical evidence and can include products such as endowments.

Family Income Benefit Insurance

This is in contrast to a Death Benefit Only policy whereby the policy holders dependents are paid a lump sum on their death. A Family Income Benefit Insurance Policy pays a tax free income to the dependents of the policy holder for a fixed term which could be for 25 years. The policy can also be index linked to keep the payments in line with inflation.

Death or Earlier Critical Illness.

This policy pays out on the first event on either death or critical illness.