Beat the jargon with our overview of different types of life insurance

Buying life insurance doesn't have to be complicated. Get a head start by reading our jargon-free overview of the different types of cover available.

Life Insurance Only

A life insurance policy that, upon death of the policyholder, pays out a lump sum payment. Occasionally the payment could be a string of payments instead of a one off lump sum. The payment will help the policyholder’s family financially and can be spent as they wish.

Life Insurance with Critical Illness

As well as having all the benefits of standard life insurance you have the added benefits of critical illness cover. If you were to become critically ill and unable to work for a long time critical illness cover will help you manage financially. The policy could provide a cash sum to help the policyholder and their family if they we’re to be diagnosed with a pre-agreed illness during the term. Always check with the advisor and read the small print to check what is covered and what is not.

Level Cover Life Insurance

Life insurance where the lump sum payment does not vary over time. This is the most common policy for those looking to protect their family financially in case the worst happens.

Decreasing Cover Life Insurance

Life insurance designed to protect the outstanding balance on the policyholder’s mortgage. As such the amount the policy will pay out falls in line with the amount remaining on the mortgage. This will be cheaper than level term life insurance.

Confidential Life Insurance

A fairly new type of life insurance that allows a person to take out a life insurance policy on another person. This can be done even without the knowledge of the other person and can be suitable when there are business relationships, divorce settlements and during movie productions.

Critical Illness Cover

Standalone critical illness cover is protection that will pay out if the policyholder is diagnosed with a specified critical illness during the term of the policy.

Death Insurance

Simply another name for life insurance.

Joint Life Insurance

A policy where two or more people are covered under one single life insurance policy. Joint cover will cost a little less than two single policies but will provide half the cover.

Real Life Cover

A new type of life insurance policy that includes the benefits of life cover, critical illness cover and income protection cover.

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