What types of life insurance are there?

There are 3 main types of life insurance.

Level term

Level term life insurance is the most common type of policy. It's called level term because the amount of money that would pay out if you died remains constant or 'level'.

Whether you die at the start or near the end of the policy term, the amount of money that pays out will be the same.

Decreasing term

With decreasing term cover, the amount of money that would pay out if you died reduces over the term of the policy as you pay off your repayment mortgage. For this reason, decreasing term cover is often referred to as 'mortgage life insurance'.

Whilst decreasing term cover is designed specifically to protect repayment mortgages, a level term policy could still protect your mortgage whilst providing additional cover for your family. The only advantage of decreasing term cover is that it's generally cheaper than level term.

Whole of life

Whole of life insurance, as the name suggests covers you for the whole of your life. It's guaranteed to pay out no matter when you die.

Because whole of life insurance will definitely pay out, it's often much more expensive than decreasing or level term cover.

Some whole of life policies are referred to as 'over 50's plans'. These policies are designed specifically for those aged 50 or over. With over 50's plans, you won't usually need to complete any medical questions and acceptance onto the policy can be guaranteed.
What types of life insurance are there? What types of life insurance are there? Reviewed by Admin on June 22, 2019 Rating: 5

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