Life Insurance
To provide a lump sum payment on the event of the claimant’s death. Finally, the sum assured may be for ‘whole of life’ meaning that the term is extended until the point of the applicant’s eventual death – this is a more expensive option as it provides a guaranteed payout, whereas with level term or decreasing policies, the cover is for a defined period. In the event of no claim, there is no return of any premiums paid through the life of the policy.
‘Level Term’ Policy
A level term life insurance policy provides financial protection for a fixed period, with the amount of cover remaining the same throughout the policy term. If the policyholder dies during the term, the policy typically pays a tax-free lump sum to their chosen beneficiaries, subject to the policy terms and conditions.
Premiums are generally fixed at the outset, making it easier to budget for the cost of cover, and the policy can be used to help protect loved ones against financial commitments such as mortgages, debts and ongoing household expenses.
‘Decreasing term’ Life Insurance Policy
A decreasing term life insurance policy provides financial protection for a fixed period, with the amount of cover reducing over time, typically in line with a repayment mortgage or other decreasing financial commitment. If the policyholder dies during the term, the policy can provide a lump-sum payment to their chosen beneficiaries, subject to the policy terms and conditions.
As the level of cover reduces throughout the policy, premiums are generally lower than for an equivalent level term policy, making it a popular option for protecting a repayment mortgage and ensuring loved ones are not left with the outstanding debt.
‘Whole of Life’ Policy
A whole of life insurance policy provides lifelong financial protection, provided the policy remains in force and premiums continue to be paid. Unlike level-term or decreasing term life insurance, there is no fixed end date, so a valid claim will generally result in a lump-sum payment to the policyholder’s chosen beneficiaries when they die, subject to the policy terms and conditions.
Whole of life cover can be used to provide financial support for loved ones, help cover funeral expenses, or assist with future financial planning.
Get a Life Insurance Quotation from Evolve
Our team of Advisers will guide you through the options and provide a recommendation of what best suits your needs and objectives, whilst considering budget factors.
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