Life Insurance Glossary of Terms
If you have a critical illness policy you will receive a lump sum payable if you are diagnosed with a major illness. This provides financial security at a very difficult time for you and your family, especially if you are unable to work. Your insurer will be able to give you information about the types of illness that are covered under such a policy. Critical illness cover is usually combined with life assurance to cover you so that you are covered for both illness and death. Cover is an optional extra under all term assurance plans which allows for the lump sum to be paid not only on death, but also in the event of diagnosis of certain critical illnesses such as heart attack, stroke, major organ transplant blindness and total and permanent disability. Critical illness can be provided on either a guaranteed or reviewable premium basis.
This pays a tax free lump sum in the event of death during a specified period in return for a fixed monthly or annual premium. At the end of the term the policy finishes and there is no maturity value. As a result this is the cheapest and simplest form of life cover available. There are two types available, Level and Decreasing:
- Level Term - provides a lump sum which will remain constant during the term of the plan.
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- Decreasing Term (Mortgage Protection) - provides a lump sum payment which decreases during the term of the plan as the amount outstanding on your mortgage decreases accordingly.
This is another form of term assurance. It will pay a regular monthly tax free income in the event of death to your dependants for the remainder of the term of the policy.
This benefit means that the sum assured will pay out if you are diagnosed as having less than 12 months to live - in simple terms, an advance payout. All our policies include terminal illness as standard at no extra cost. Terminal illness should not be confused with critical illness which is an entirely different benefit.
This benefit means that the sum assured will pay out if you are diagnosed as having less than 12 months to live - in simple terms, an advance payout. All our policies include terminal illness as standard at no extra cost. Terminal illness should not be confused with critical illness which is an entirely different benefit.
