Level Term Assurance
Level Term Assurance is a simple and straightforward way to protect yourself and your family. It is a cheap and affordable form of cover.
Level Term life Assurance will pay out a lump sum amount (called the sum assured) if you die whilst the policy is in force.
If you have a family and you are the main income earner then it is important that you have cover, to ensure that your family would not face financial hardship if you died unexpectedly.
When you apply for the policy you can select the amount of cover and length of time you want to be covered for. For example if you decide to choose a twenty five year tem then the policy will pay out if you die within the twenty five year period.
The cost of the cover will depend on your age or ages (if the policy is a joint policy), the sum assured, your health and the term of the policy. The cost will also depend on whether you have and medical issues and if you are a smoker. The cost of cover will vary between different providers.
Independent Financial Advisers are able to review the whole market and choose the policy that will offer you the best terms and options.
Once the policy ceases then there is no value attached to it. This is why the premiums are usually affordable for most people. This type of policy is usually cost effective and is easy to understand.
Flexible Life Assurance Products
Some product providers now offer policies that will also offer other types of cover as well as level term assurance. Additional cover such as income protection (permanent Health Insurance), Critical illness cover and Private Health Insurance can also be added to the policy. These new types of policies offer greater flexibility than older simpler types of policies.
Underwriting
Once your application for the life cover has been sent to the provider, they will then review the information supplied on the application. This process is called underwriting. If the provider requires further information they might write to your GP.
The product provider will then issue acceptance terms. This outlines the precise terms that they can offer you. If the terms are acceptable to you, the policy can then be put into force. If the new policy is to replace an old one you should then cancel the old policy.
Writing Policies under Trust
In some cases it might also be worth writing the policy in trust. This will ensure that the proceeds of the policy are not paid into your estate, but to your beneficiaries. By using a trust you can ensure that the policy proceeds are paid to the right people, whilst making a potential inheritance tax saving.