Introduction to Life Assurance
Life assurance was originally exclusively death insurance. It is still primarily taken out to provide benefit on death but in recent decades life companies have introduced choice in both the length of term of policies, the mix of protection with a saving element (a unit linked policy) and the type of protection provided. A policy may also have a critical illness option which provides for payout other than in a death situation.
Types of Life Assurance
Term Life Insurance
Term insurance is, as the name suggests, a policy which only pays out if you die within a specified term. This could be 10, 20, or 30 years from the date the policy commences.
This is the simplest type of life cover, and it usually demands that you pay a premium on some sort of regular basis in order to be covered. The amount of that premium depends on both the amount of money you have agreed as the death benefit and the statistical likelihood you will die. You are effectively gambling with the Life Company on whether or not you will die during a certain period. If you die you "win" and someone gets the payout. If you don't die you "lose" and you get nothing at the end of the insured period because you are still alive. This is one bet we all want to lose.
Dr Gary Ellison t/a Ellison Financial Consultants is regulated by the Central Bank of Ireland.