Finance - Life Assurance

Life Assurance by Gary Tallon


Planning for your future life can seem like a time consuming
burden when you have a young family. After all, where do you
find the time in your life to think about things like life
assurance while you're struggling to keep work and home life
pressures in check? Our departure from this life though cannot
be predicted. You and your partner may live a good life to a
ripe old age, or you could pass away tomorrow. If the worst were
to happen to you, where would that leave your partner and your
dependants? Would they be financially secure for the rest of
their life after their loss and not have to worry about paying
the mortgage? If not, then a life assurance policy is a must.

Life assurance for life and death

Life assurance, also known as life insurance, is an assurance
policy that pays out a lump sum to a named person(s) in the
event of your death. This type of assurance policy is
inexpensive to maintain, assurance premiums being very low if
you take up the assurance policy early in life. Depending on the
nature of the assurance policy you may pay assurance premiums up
until the end of your life or up until a specified age.

You can also format your assurance policy as a single life
policy or as a joint life policy. For married couples with a
mortgage and/or dependants, a joint life policy is often the
preferred type of assurance to opt for as the assurance policy
has the flexibility to pay out on first death or second death.
An assurance policy that pays out on first death is beneficial
for those carrying a mortgage and where the deceased's life
partner and/or dependants are still alive.

Types of life assurance policies

When considering buying into a life policy you'll find three
basic types of assurance policy available from assurance
companies - term assurance, family income assurance and whole
life assurance. Term assurance - Term assurance is a
straightforward life policy that pays out a tax-free lump sum
upon your death. This is a basic life policy that runs to a
specified term, often coinciding with the life of a mortgage.

Family income assurance - This life policy is a set term
assurance policy that pays out to dependants should you die
during the term of the assurance policy. Pay out is on a regular
basis (like an income) until full term of the assurance is
reached.

Whole life policy assurance - This is an open-ended assurance
policy that pays out a lump sum upon your death, regardless of
when you depart this life.


Article Source: Life Assurance