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Life insurance is becoming more and more popular
with many people now realizing the importance and the
benefits of a good life insurance policy. There are two
main types of popular life insurance, both of which offer a
range of invaluable benefits to consumers. Level Term Life Insurance Level term life insurance is the most popular type of life
insurance policy with consumers, and this may be because
it is also the cheapest form of insurance. With level term
insurance, you and your family can enjoy peace of mind at
an affordable price. If you die during the term of this
insurance policy, your family will receive a lump sum
payment, which can help to cover a number of costs as well
as provide some degree of financial security at what will
inevitably be a difficult time. The money could assist with
costs such as: § Mortgage repayments One of the reasons that level term life insurance is a
fair bit cheaper than other life insurance is because the
insurer only has to make a payment if the insured party
passes away, and even then the insured party has to die
during the term of the policy for the next of kin (or the
named beneficiary) to be eligible for a payout. One of the
great things about levels term insurance is that you can
benefit from cover for just a few pounds each week, and
because the payments remain the same throughout the term of
the policy, you'll never have to worry about rising
payments. The reason why a level term insurance policy is so called
is because the repayment remain level throughout the term
of the policy, so you will never have to worry about the
cost of your policy rising. The policy is also taken over a
fixed term, which is where the 'term' part of the policy
comes in. This means that you can enjoy easy budgeting and
low cost repayments, and you'll know exactly how long you
will be making payment for. On the downside, once the
policy expires you will not be able to reclaim any money
and the policy will be cancelled, so you will then need to
look at taking out alternative life insurance cover. The average term of a level term life insurance policy -
unless otherwise specified - is fifteen years. There are a
variety of factors that contribute to the cost of the
policy such as whether you go for the most basic package or
whether you include a bolt-on such as critical illness
cover, whether you are a smoker, your general health, and the term over which you take the policy out. Whole Life Insurance Unlike level term life insurance, whole life cover offers
a guaranteed payout, which to many people makes it better
value for money in the long run. Although the repayments on
this type of cover are more expensive than level term
insurance, the insurer will make pay out whenever the
insured party passes away, so the higher monthly payments
will guarantee a payout at some point. There are a number of different types of whole life
insurance policies, and consumers can select the one that
best fits their needs and their budget. As with other
insurance policies, you can tailor-make your whole life
insurance cover to include additional cover such as
critical illness insurance. The variations on whole life
insurance cover include: Non-profit whole life insurance policies: This is the
simplest form of whole life cover, and enables you to enjoy
the convenience of level payments through the term of the
policy until you die. Upon death, your family received a
payout and the policy becomes null and void. If you want to
pay a little extra, you can take out a policy that is fixed
over a specified term, which means that you will only be
making payments for a certain amount of time, but your
family will still receive a payout when you die. With-profit whole life insurance: This is a cover and
investment type scheme, where your monthly payments are
split between your cover premiums and the investment side
of your policy. You will enjoy a guaranteed assured sum,
and you may find that your insurer adds discretionary
bonuses. Low cost whole life insurance: One of the cheapest
forms of whole life cover, this type of policy features a
decreasing term plan, and the policy is combined with a
profits fund. As bonuses are added to the profit side of
the policy, the policy term decreases. This provides a cost
effective solution for those that want to enjoy the
benefits of whole life insurance cover without having to
make high monthly payments. Unitised whole life insurance policy: When you purchase
this type of whole life cover, you will also be investing
in with-profit units. This means that when the insurer
makes a payout, the sum awarded will be dependant upon the
value of the units in comparison to the value of the death
benefit (the payout will be based upon whichever is the
highest in value). Each month units are cancelled in order
to increase levels of death benefit cover, with reviews
carried out from time to time to ensure adequate levels of
death benefit cover. Summary Both level term insurance policies and whole life policies
offer valuable peace of mind to policyholders. The cost of
this type of life cover is a small price to pay for the
peace of mind that comes with being protected, and you can
increase this peace of mind by adding extras such as
critical illness to your policy for just a small extra fee. As a nation, we like to insure just about everything we
can - our cars, our homes, our belongings, our pets, and even
our credit repayments. It therefore makes sense that we
should insure the most important thing of all - our lives. Claire Bowes is a successful freelance writer and owner of
http://www.a1-life-insurance-quotes.co.uk where you will find further information and advice on all aspects of life insurance policies, mortgage protection and critical illness cover.
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