Require Life Insurance Advice?
Before shopping around and quickly choosing any life insurance policy, it’s a good idea to seek out life insurance advice from a certified financial adviser. Not only will you get the proper advice you need, you’ll also end up with the life insurance policy that suits you.
There are different types of life insurance to be aware of before making any decisions. These types include investment-type and term life insurance policies. Investment-type insurance policies normally pay out when you die, or on a specific date. A Term Life Insurance policy will pay out a lump sum amount if you die before a specific date.
Types of Life Insurance Policies
An investment-type life insurance policy usually requires the policy holder to make monthly payments towards the policy. A number of these policies pay out only upon death, while others pay out on a pre-determined date or upon death. The performance of the investment-type policy fund will be a factor in the total amount paid out. Here is a breakdown of the different life insurance policies and when they are paid out.
Policies that pay out upon death:
- Whole of Life Insurance
Policies that pay out upon death, and/or on a pre-determined date:
- Income and growth bonds
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With-profits bonds
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Unit-linked bonds
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Maximum investment plans
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Endowment Policies
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Other- Life insurance policies that gain value which can then be withdrawn
Investment-type insurance policies can be quite costly in relation to traditional investments. Make a point of getting life insurance advice before purchasing any type of investment-type life insurance policy.
Term insurance
A more affordable way of caring for your loved ones upon death is with a Term Life Insurance Policy. This type of life insurance policy usually offers lower monthly payments thus making it easier for those with limited income to purchase a life insurance policy.
A Term Life Insurance policy will pay out a pre-determined amount if the policy holder passes away within a select period of time. However, if the policy holder survives the term, there is no payout whatsoever. The “term” is a pre-defined period of time in which the policy is active. For many, this “term” may be for the length of a mortgage, or until retirement. Term life insurance is also referred to as “Protection Only” insurance.
When you’re shopping around for an Investment-Type insurance policy or Term Insurance, it’s worthwhile to seek life insurance advice before making any final decisions. Things to take into account when deciding upon the type of life insurance policy that suits you are:
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Rate of return? (investment-type)
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Risks involved? (investment-type)
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Does it suit your requirements?
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Charges involved?
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Are the payments flexible? (Missed payments, cancelling, or switching policies.)
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Restrictions or conditions?
Be sure to take other factors into consideration when deciding upon the sort of life insurance policy you’ll require.
Key facts Documents
No matter which life insurance company or broker you deal with, all are managed by the FSA (Financial Services Authority). FSA rules state tht Keyfacts or Key Features documents are required to be provided to you assist with choosing a life insurance policy that’s best for you. Keyfacts documents include:
- Types of services offered, tips, and information on products and fees.
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Life insurance advice related to all insurance policies recommended or provided by the company/broker.