Life Insurance, Critical Illness and Family Income Benefit
We can advise on on the right protection policy for you. There are number of different protection policies that are available- each designed to address a specific need- whether that is to provide protection in the event of death or an illness or a form of regular income.
- Home Cubic
- Life Insurance, Critical Illness and Family Income Benefit
Life Insurance & Other Protection Products
The One That’s Right for You
Common Protection policies that we advise on
Life Insurance
Policy that pays out in the event of death.
Often taken out at the same time as a mortgage.
Cover can Remain Level or Decreasing (See Below)
No Cash In Value if the policy term ends prior to death
Critical Illness Cover
Policy that pays out in the event of a Critical Illness.
Often taken out alongside a Life Insurance policy.
Illnesses covered are detailed by the insurer from the outset
No Cash In Value if the policy term ends prior to death or Terminal Illness
Family Income Benefit
Policy that provides a regular income for the family upon death.
Starts paying out upon Death or Terminal Illness
Have the option of setting the proportion of income that gets paid
Objective is to provide a regular income instead of a lump sum
Common Terminology
As some of the terminology used in Protection literature is specific to protection, to help understand each product we have listed some common terms that get used and what they mean
Critical Illness Cover (Insurance)
This policy will pay out in the event of you incurring a critical illness that is specified in the list of critical illnesses set out by the insurer being recommended (subject to a survival period - see below). You can also get children’s critical illness cover.
Decreasing Term Policy
This can apply to both Life Insurance and Critical Illness Cover. A decreasing term policy is one where the cover amount decreases during the policy term. This type of policy if typically taken out to protect or run alongside a repayment mortgage where the balance of the mortgage is decreasing throughout the term of the mortgage. The idea of complementing a decreasing term policy with a repayment mortgage (where the mortgage term and policy term are kept the same) is that if at any point during the policy term you die (with a Life Policy in place) or were to incur a listed Critical Illness (with a Critical Illness Policy in place), the benefit paid out from the policy will be sufficient to cover the outstanding balance of the mortgage.
Family Income benefit
Upon death this policy is intended to provide a regular tax-free monthly income to the policy holders family- for the duration of the policy term. It is different form a level term life insurance policy where the pay-out would be in the form of a lump sum instead of a regular payment that the Family Income Benefit provides.
Joint Life Basis or Single Life
Usually a joint life (or critical illness policy) will work out to be cheaper than two single policies. However, a joint policy will only pay out once. This means that if the policy has already paid out then at some point one of the policyholders will cease to be covered by the policy.
Level Term Policy
This can apply to both Life Insurance and Critical Illness Cover. A level term policy is one that sets out the cover amount at the start of the policy. The cover amount remains the same (Level) for the duration of the policy. Therefore, if at any point during the policy term you die (with a Life Policy in place) or were to incur a listed Critical Illness (with a Critical Illness Policy in place), the benefit will be the amount that the cover was originally taken out for.
Life Insurance
This policy will pay out in the event of your death. Depending on the insurer, benefits such as GP cover (which enables you to consult a GP- for example if you are unable to get an appointment with your regular GP) may be included or offered at an additional cost.
Survival Period
The period that you must survive after the diagnosis of a critical illness covered by your critical illness policy. Different providers may offer different survival periods. The shorter the survival period the higher the chances of receiving the benefit.
Waiver of Premium
If this benefit is purchased with the policy and you suffer an accident or sickness that prevents you from working, your premiums will be waived. As this is a feature whereby the qualification criteria with respect to your inability to work can vary from insurer to insurer, it is important when your purchase the policy that you understand from the outset what circumstances the waiver of premium for your specific policy will come into effect.
Whole-of-life insurance
A policy that will last for the whole of your life, this will ensure that your loved ones are guaranteed to receive a benefit. However, as there is a guaranteed benefit the premiums are higher in comparison to Term Insurance policies (above).