Ageas protect Life insurance
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Level Term, £200,000 over 20 years, non-smoker.
|Company||Age 34 male||Age 34 female|
What is a life insurance?
Life insurance or life assurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a fixed sum of money upon the death of the insured person. The contract holder usually pays premium for the agreed period of time and in case of his death dependents get a lump sum from the insurer. An individual can use life insurance for many reasons. The most common reason is to protect family members from financial distress. It is advisable to get a life insurance when family has mortgage or other financial obligations and it would be difficult to pay it back in case of death of wife or husband. There are a lot of types of different insurance policies such as term life insurance, decreasing-term insurance, inreasing-term insurance, whole life insurance, renewable term life insurance, single/joint life insurance, death-in-service life insurance, critical illness life insurance, over 50s life insurance, level life insurance. Usually life-based insurance contracts tend to fall in two categories: protection and investment.
Term life insurance
Term insurance policies last a fixed period of time. This type of insurance usually costs cheaper as it covers the person for only agreed amount of time unlike and there is no guarantee that the insurance company will need to make a pay-out. Usually term insurance is chosen to provide some precautions for the family in case of a person’s death. A good example is when the mortgage is taken. The death of the breadwinner could cause some serious financial problems for the family and it is likely that the members of the family will not be able to repay the mortgage by themselves. Thus, an individual can choose term insurance to protect his family and relatives in case of his death until the mortgage is terminated. Most insurance providers limit the duration of term insurance contract. This limit can be set at the time when children reach adulthood, finish the college or when the mortgage is expected to repaid. It should be mentioned that term insurance becomes more expensive as the person ages. It is because the older the people become the bigger possibility that they are going to die.
Decreasing term life insurance
Consider the situation when an individual wants to cover himself so it would be easier to pay off mortgage for other family members in case the insured person dies. It is natural that mortgage burden is decreasing over time and there may be no need to get the same insurance cover in the first year after as in the last one. In this case a good option is to consider taking a decreasing term insurance. As the name suggests, this type of insurance guarantees lower potential payoff as time passes. However the advantage in this case is that the premiums that person pays are also lower over time.
Increasing term life insurance
Increasing term insurance is usually used when individual needs potential pay-outs to increase over time. Pay-outs can be linked to Consumer Price Index (CPI) or inflation. There is also a possibility to make potential pay-out higher by a certain percentage each year. However, such a policy requires the person to pay higher premiums over time compared to term or decreasing term insurance premiums.
Whole life insurance
Whole life insurance is an insurance policy that guarantees the payment in case of an insured person’s death. Other insurance policies usually guarantee the payment for specified time span, however with whole life insurance person can be sure that whenever he dies, the money will be paid to his dependents.. The premiums might be paid the whole time or until certain period and after that period an individual is still insured even though he does not need to pay premiums anymore. Moreover, whole life insurance policy is usually associated with investment or pension funds. Thus, it is possible that premiums that are paid each month will have gains if fund’s value gets bigger.