Protect Yourself and Your Family

Hi buddies,

Lets talk of protecting yourself and your family today.

There are three main types of insurance covers you can buy to protect yourself and your family:
1. life insurance, 2. private medical insurance and 3. critical illness insurance/rider.

If you want your financial health to be completely bionic then you could choose all three types of insurance, but if your family finances are more restricted, it might be better to insure yourself with critical illness insurance and life insurance. Critical illness insurance should not be confused with private medical insurance or even income protection insurance and it’s important that you do a full evaluation of your needs before you pursue the different insurance options.

The purpose of critical illness cover (CIC) is to fill a gap that is left by traditional policies, which will only provide a pay-out on the death of the policy holder. CIC provides a tax free lump sum following the diagnosis of one of a number of life-threatening illnesses or certain types of surgery. The sorts of situations usually covered include the diagnosis of cancer, a stroke, a heart attack, the loss of a limb and many other serious disabilities.

Critical illness insurance policies are typically sold to cover mortgage repayments and are often sold alongside a package to ensure the borrower can repay the loan in all circumstances. It is worth noting that if a combined and critical illness cover package is taken out, then it would not be unusual for an insurer to pay out for only one of the events. Therefore if the policy holder suffers a critical illness and then dies at a later date, there will only be one pay-out – for the initial illness. It is essential whenever you take out a policy that you make sure it covers all of your needs and those of your family. Don’t estimate how much cover you may actually need. You will additionally need to consider the period for which you want critical illness cover, such as a set number of years to cover the mortgage or no fixed period at all, so you can maintain the policy as long as you need it.

For the majority of people, the most important benefit of critical illness insurance is to protect their mortgage and most mortgage protection policies allow you to include and critical illness cover. If you already have in place, you can buy an additional, separate critical illness insurance policy.

Resources:
http://www.abi.org.uk/
http://www.moneynet.co.uk/insurance/index.shtml
http://www.moneynet.co.uk/home-car-travel-insurance-guide/index.shtml
http://www.cashzilla.co.uk

Life Insurance. What Does This Mean To You?

Hi friends,

Lets start with Life Insurance. So, what does it mean to you?

For some it means security, knowing that their family or business is safe should they unexpectedly pass away. For others it conjures up images of pushy salesmen and confusion about what they are buying.

By learning about the different life insurance policies available, you can make an informed decision that will give you peace of mind and satisfaction with your responsible decision.

There are three main types of policies. Here is a brief explanation of what they mean:

1. Whole Life Insurance

Whole Life Insurance is a permanent insurance. This means that the policy stays in effect for your whole life, as long as premiums (payments) are paid up to date.

The cost of whole premiums will usually be more than the cost of an equivalent amount of term insurance because the cost is averaged. While the cost of term insurance goes up with each renewal, whole never needs renewing. Instead of paying smaller premiums when you're young and high premiums as you age, whole life premiums stay the same.

In some policies a savings option can be added which can be used to borrow against.

2. Universal Life Insurance

Universal Life Insurance is another form of permanent insurance. Like whole life, the universal life policy is in effect until you die. You never need to renew the policy (regardless of health) and the premiums will never go up.

Universal life also incorporates other financial services including a savings plan that can be made in addition to the policy. Otherwise the policy can be surrendered in exchange for the savings that have accumulated. Policy owners can often choose from many options including adding another person to the policy, managing their own investments or using the savings to cover the costs of premiums.

Universal is the most expensive option because of the amount of flexibility and options.

3. Term Life Insurance

Term Life insurance is the least expensive policy option. Term insurance is selected for a certain period of time (term) such as; 1 year, 5 years, 10 years or 20 years or anything.

Term life insurance is a good choice for young families with dependants and high debts (such as a loans, mortgage) that they will be no longer be responsible for in 15 to 20 years when the policy ends. Term life insurance has no cash value & it cannot be borrowed against or cashed in. If the policy ends and the individual wants to renew the policy the cost of premiums will be higher.

Using term insurance to cover the basic financial requirements of an individual while also instituting a separate savings plan may reduce the need for insurance later in life.

Get back to me with your queries...