The Insurance Guy

Life Insurance

You don’t take out life insurance for yourself! You take it out to protect your loved ones.

There are a number of types of life cover.

Term life cover
Level life cover
Accidental death cover
Mortgage protection

Term Life Cover

This is the cheapest and the most common type of life cover and is suitable for people looking to insure themselves for a short to medium term such as to cover a mortgage, provide for the family or to cover the partners of a business. The premiums increase on a yearly basis based on your age, gender and inflation. The premiums you pay will be determined on your health, lifestyle and occupation. You can choose to fix your premiums for 5 or 10 years if you like with some insurance companies.

Level Life Cover

This is policy is suitable for your long term needs. The benefit of this policy is that the premiums are fixed for the term of the policy. This is suitable for lower sum insured scenarios and is most commonly put in place to cater to the needs of having some level of cover in your older age once you cannot afford or do not need the bigger term life insurance. The idea is to buy a small amount of cover when you are younger and get a cheap fixed price for it and enjoy the benefits of the low premiums once you have retired or in your twilight years. This policy is ideal for a funeral plan or to leave your children a legacy.

Accidental Death Cover

Like the name suggests the policy will pay out a lump sum in the event of the insured dies due to an accident. This insurance policy has limited health underwriting and is suitable for people who are uninsurable due to their health condition. This way they can at least get some cover.

Mortgage Protection

This is mainly term insurance taken out to cover a mortgage or debt. The term Mortgage protection is just the banks way to label a product that they can tack on to your mortgage. In my opinion you don’t need life cover and mortgage protection insurance. If you incorporate the value of your debt into the calculation of your life insurance sum, you will not need to double up with this cover hence saving you money.