In the UK there are many types of insurance policy. Most people are familiar with products such as motor insurance and travel insurance, but it is often not until a person (or a couple) decide to move into the property market that they start to evaluate the need for insurance to cover the mortgage repayments if they were to die, become seriously ill, or to lose their job. Life insurance policies with critical illness cover are often designed to ensure that the mortgage is paid off in full in the event of death, or on being diagnosed with certain serious illnesses. Policies may extend for the whole of a person's life, but those which just cover the term of the mortgage - term insurance - are considerably less expensive.
The Association of British Insurers (ABI) is a trade body which represents the interests of the insurance industry in the UK. One of their roles is to provide general information which helps customers understand how different types of insurance work.
For example, one may download leaflets and booklets from the ABI website explaining all the main classes of insurance business, such as motor vehicle, home and contents, income and mortgage protection, and life and critical illness insurance.
Very many people take out life insurance at the time of buying their first house. These policies are usually designed to clear the mortgage if the home owner were to die. They therefore protect families from homelessness if they lose the income of one or both parents.
Life insurance policies which only last for a fixed length of time - term insurance policies - are normally cheaper than those which last for a person's entire life (whole life, or permanent policies). As first mortgages are often for a term of around 25 years, many term insurance policies are also for that length of time.
When the mortgage is a repayment mortgage (i. E., not an endowment mortgage), the amount owed (the mortgage principal) will be gradually reduced until it is finally cleared. Life policies can provide a reducing benefit to match this. These are called decreasing term policies, and they have lower premiums than level term policies.
Life insurance policies pay a lump sum on the event of the death of the insured party during the term of the policy, but it is of course advisable to consider what would happen if that person were to become seriously ill, and to be unable to continue working. Most policies provide critical illness cover as an option. As well as providing the benefit on death, these policies also pay out on the diagnosis of certain serious and life threatening or disabling illnesses, such as cancer, heart attack, kidney failure or stroke.
The Association of British Insurers (ABI) is a trade body which represents the interests of the insurance industry in the UK. One of their roles is to provide general information which helps customers understand how different types of insurance work.
For example, one may download leaflets and booklets from the ABI website explaining all the main classes of insurance business, such as motor vehicle, home and contents, income and mortgage protection, and life and critical illness insurance.
Very many people take out life insurance at the time of buying their first house. These policies are usually designed to clear the mortgage if the home owner were to die. They therefore protect families from homelessness if they lose the income of one or both parents.
Life insurance policies which only last for a fixed length of time - term insurance policies - are normally cheaper than those which last for a person's entire life (whole life, or permanent policies). As first mortgages are often for a term of around 25 years, many term insurance policies are also for that length of time.
When the mortgage is a repayment mortgage (i. E., not an endowment mortgage), the amount owed (the mortgage principal) will be gradually reduced until it is finally cleared. Life policies can provide a reducing benefit to match this. These are called decreasing term policies, and they have lower premiums than level term policies.
Life insurance policies pay a lump sum on the event of the death of the insured party during the term of the policy, but it is of course advisable to consider what would happen if that person were to become seriously ill, and to be unable to continue working. Most policies provide critical illness cover as an option. As well as providing the benefit on death, these policies also pay out on the diagnosis of certain serious and life threatening or disabling illnesses, such as cancer, heart attack, kidney failure or stroke.
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For the best life insurance online, visit premiumlifecover.co.uk. Find out how to protect your family with critical illness cover.
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