Here are some examples of the many types of protection currently available, which all protect you and your family/loved ones for the future to ensure you do not risk losing your property in spite of life events:
• Decreasing Term Life insurance: This product provides a lump sum payment on death. It is called decreasing term assurance because the cover decreases each year. Many people set this up in line with their repayment mortgage so that at any time, if the insured dies, the cover pays off any outstanding mortgage debt remaining. This also helps keeps the costs down.
• Level Term (life) Insurance: Similar to the decreasing cover, this will pay out in the event of a death of the insured to cover an outstanding mortgage but the cover remains level (the same) throughout the term.
• Critical Illness Cover: This type of cover can be taken out as a standalone policy or alongside your level or decreasing life insurance plan. Rather than pay out for death, this instead pay out a lump sum during the mortgage term but due to a critical illness (such as cancer or heart condition). These policies also may have a survival period after diagnosis.
• Permanent Health Insurance (usually known as income protection): Provides a long term, usually tax free income, if you are unable to work due to accident or sickness. This usually will be for at least the mortgage term, or preferably to retirement. This tends to be set up to take over from when your employer’s sick pay would normally end e.g. 13 or 26 weeks.