There are several ways in which to protect yourself and your family in the event of an untimely death. Most people take out life insurance to provide for their families and alleviate any financial worries at a difficult time.
There are several options:-
– Level Term Assurance pays a lump sum in the event of death during the term of the policy. There is no investment element within a term assurance contract, so at the end of the term there is no maturity value and life cover lapses. The benefit is paid tax free and premiums are usually monthly, and fixed throughout the term. The term and benefit are known from the outset, so there are no investment content and term assurance is a very cost-effective method of protection.
– Decreasing Term Assurance works similar to Level Term Assurance, but the benefit is set at outset and gradually decreases over the term of the policy. These policies can be used as cover for a repayment mortgage, or other loan where the amount of capital outstanding also decreases over time. The premiums are kept very low, because the benefit reduces over time.
– Family Income Benefit works the same as term assurance but instead of paying a lump sum upon death, it will pay a regular monthly tax free income in the event of death to your dependants up until the end of the term of the policy.