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Life and Protection Insurance: The most valuable gift you can buy?

Posted on Friday 4th of December 2015.


walk-842535_640.jpgLife and Protection Insurance policies (sometimes known as ‘Family Protection’) offer a financial safety net for you and your loved ones, should the worst happen.

They can provide a regular income or cash payout to ease the financial burden of:

  • death
  • serious injury or illness
  • unemployment (as an additional cover with certain policies)

Which one is right for you?

Life Insurance can provide financial security to those who depend on your income when you die. It could pay off your mortgage, or provide an income to help cover things like regular household bills.

The most appropriate type of Life Insurance will depend on your circumstances:

  • Term Insurance: pays out a lump sum if you die within the agreed ‘term’ (the amount of time you have chosen to be covered for, eg. 20 years).
  • Whole of Life Insurance: pays out a lump sum when you die, whenever that is, as long as you are still paying the premiums.
  • Family Income Benefit Insurance: pays out a regular income, instead of a lump sum, to provide ongoing financial support for those who depend on you.

Critical Illness Insurance pays out a tax-free lump sum on the diagnosis of certain life-threatening or debilitating conditions, like cancer, heart attack or stroke.

You may decide to buy Critical Illness Insurance when taking on a major commitment, like a mortgage or starting a family, but it can be bought at any time to provide peace of mind.

Income Protection Insurance pays out a regular, tax-free income if you become unable to work because of illness, injury or unemployment. It could help you keep up with your mortgage or rent payments, as well as other living costs, until you’re able to return to work.

Things change – and so should your cover

You may already have one or more of the above in place, but it’s still worthwhile reviewing your current cover levels. Personal circumstances can change regularly so it’s important to ensure your level of cover remains appropriate.