A life insurance policy pays out a lump sum of money to your family or specific chosen person.
The lump sum is typically used for one or more of the following reasons:
- Pay off a mortgage
- Provide a lump sum of money to pay for household bills giving a family financial security
- Cover maintenance costs
- Cover an inheritance bill
There are two main types of life insurance policies:
Term Life insurance is a great way to help protect your family if you’re ever diagnosed with a terminal illness or you die, because it provides a cash lump sum they can use to pay off the mortgage or other debts.
Whole of Life gives you lifelong cover with a guaranteed pay-out on death
Whole of Life Insurance
Whole of Life Insurance is a policy that pays out when the worst should happen, the policy runs for the rest of someone’s life. This means that there will be a guaranteed pay out.
This is typically used where money will be needed at the end of a life, wither funeral care, an inheritance bill or wanting to leave money as a gift.
Family Income Benefit
Family Income Benefit is a life insurance policy that instead of paying out a lump sum provides a regular income. Should the worst happen to a parent this would give either the homemaker the security of the regular income or the main income earner the ability to stop work or use the regular payments to help support the family.
This can also be used to replace maintenance payments should the worst happen.