Life Assurance

This is a general term to describe different types of personal protection policy whose main purpose is to provide payment in the event of death.

If you have a mortgage, you should have been advised to take out Life Assurance to at least cover the amount of the mortgage.

It is assurance which will pay out on your death, so you personally do not benefit from it but your loved ones will. Generally speaking, the younger you are the cheaper it will be, being a non-smoker will reduce payments too.

There are several types of assurance:-

Level Term Assurance

This pays out if you die, but if you live to the end of the policy it will cease and you will receive no money. Likewise, if you stop paying your cover will cease. If the policy has a waiver of premium option, it may remain in force under certain circumstances.

Decreasing Term

As the name suggests, the premiums decrease over time and if the policy comes to an end it will cease and there will be no payout. This policy is appropriate to run alongside a repayment mortgage as, as the mortgage gets smaller so does the policy until eventually it is no longer required as the mortgage is paid. 

Whole Of Life

This will pay out on death, whenever it occurs as long as the policy is still in force. Unlike a Term policy, a Whole of Life policy has a surrender value, because of this they tend to be more expensive. Please note the policy may not pay out in the early years.