Term Assurance - Life Cover
What is it?
Term Assurance provides a lump
sum on the event of premature death within a
specified term that can be applied in a number of
ways. In some cases an additional critical illness
benefit can be added whereby a lump sum is paid upon
diagnosis of a serious health condition such as
heart attack, stroke or cancer. It may also be
possible to take this benefit as a stand-alone
contract.
Who is it for?
This type of assurance is
appropriate where a lump sum is required upon the
premature death/critical illness of the person
covered. The lump sum can be then used in a number
of ways:
- When invested can provide long term security
for beneficiaries or dependant
- Can be used to repay a debt
- Can be used as part of a business protection
strategy
- Can be used to pay an Inheritance Tax
liability
How does it work?
The options with Term Assurance
are:
- Level Cover
Under this plan the sum assured remains the
same for the duration of the contract.
- Increasing Cover
Indexing your sum assured allows you to
maintain the real value of your life assurance
protection as it increases automatically each
year regardless of your state of health at that
time. Your contribution will increase each year
to reflect the increased sum assured. If the
sum assured is increasing by 5% the premium will
increase by more than 5% to cover not only the
increase in benefit but also the fact that you
are one year older.
- Convertible Cover
Under this plan the sum assured remains the
same for the duration of the contract. An extra
payment is made to allow the policy holder an
option to convert the original policy (or part
of it) to another type of policy, increasing
term assurance, whole of life or endowment,
without further medical evidence being required.
- Decreasing Cover
Under this plan the sum assured is specified
at the outset of the contract and decreases
throughout its term.
- Mortgage Protection
Under this plan the sum assured is specified
at the outset of the contract and cover
decreases throughout the policy term. The
decrease in sum assured will be broadly in line
with the reducing mortgage debt.
- Reviewable Cover
Under this plan the sum assured remains the
same for the duration of the contract. Premiums
are kept to a minimum as it is you rather than
the insurance company who are shouldering the
risk of changes in mortality experience. The
insurer has the right to review premiums based
on claims history, which could mean premiums
increase significantly at a review.
- Renewable Cover
Under this plan the sum assured remains the
same for the duration of the contract. For a
higher premium you acquire the option of
extending the original term of the policy
without having to provide medical evidence.
- Family Income Benefit
This type of policy undertakes to
pay upon death of the policy holder a regular
lump sum for the term remaining on the policy at
the date of death.
Whatever your financial advice requirements are,
you can be assured that Ashton Hoyle are well
positioned to provide an innovative answer and we
look forward to speaking to you on any financial
matter. Contact us now
to see how we can help.
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