Most insurance companies offer a variety of different insurance plans including standard fixed term cover, whole life cover and decreasing term cover. Over 50s plans are also generally available from insurers and come with their own set of specifications. Standard additional benefits include critical illness cover (automatically covers children), terminal illness cover, income protection and funeral plans. Be aware that insurers may have different definitions of and criteria for each of these benefits.
Level or fixed term cover provides a lump sum pay-out upon death at the end of the cover term for a fixed monthly premium. This is the standard and most common life cover plan. Whole life cover is another option. Although slightly more expensive, whole life cover guarantees a pay-out regardless of when you die – there is no term end date. With these packages, additional benefits such as critical illness cover may be added for little or no extra cost depending on the individual insurer.
Decreasing term or mortgage protection plans offer monthly pay-outs after death that gradually decrease over time until the debt is paid in full. Over 50s plans have a tendency to be more expensive, but monthly payments are often waived should you live beyond the age of 90, even though the cover continues until death. Certain additional benefits may be added to these plans depending on the individual insurer.
Eligibility for critical or terminal illness cover depends on the individual insurer. Both types of cover provide either lump sum or monthly pay-outs upon diagnosis for a fixed duration or until death. Income protection plans can be used when the ability to earn an income is lost due to illness, injury or involuntary unemployment, but terms and conditions again depend on the criteria stipulated by the individual insurer.