14th May 2021
There are two main types of life insurance: term life insurance and whole life insurance. But what is the difference? Term life insurance sets a maximum term and pays out a cash sum if you die during that period, if you do not die during the term, there will be no lump sum payable. Alternatively, you can opt for whole-of-life insurance, which will ensure you are covered until you pass away, no matter your age.
With both types of policy, a cash sum will be paid out if you pass away as long as you keep paying your monthly premiums. When choosing a life insurance policy, it’s entirely up to you to decide how long you would like your cover to last and whether you would like a single cover or joint cover.
Critical illness cover will cover you if you are diagnosed with a terminal or critical illness and payout a lump sum to assist you at a time when you might not be able to work due to your illness.
BENEFITS OF LIFE AND CRITICAL ILLNESS INSURANCE
Both types of policies offer a host of benefits and are particularly important if you own a property with a partner, or have children or any other dependents that rely on you financially. The benefits include:
- Helps to protect your loved ones financially
- Can help to reduce the financial stress of losing a parent or partner
- Provides peace of mind that your loved ones will be looked after
- Can help compensate for a loss of earnings in the event of your death
- Can be put towards any unpaid debts that will fall to loved ones
- Can contribute towards funeral costs
- Can provide you with a lump sum payment when diagnosed with a terminal or critical illness
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