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There are two broad types of life insurance: Term Insurance or protection-only and Investment-type Insurance.
Term Insurance:
This type of policy guarantees to pay out a set amount if you die within a predetermined period of time ('term'), but doesn't pay out anything if you survive the term. In general the term would be, for example, the number of years left on your mortgage or the number of years until your children are financially independent. This type of insurance is usually the most affordable way of getting life coverage.
Investment Type Insurance:
Investment-type insurance includes policies that pay out on a certain date or when you die. The amount paid out by investment-type policies depends on how well the investments in the insurance fund have performed.
About Critical Illness:
Critical illness insurance is a form of insurance that provides a lump-sum payment should you become seriously ill. This type of insurance can be an add-on to a life insurance policy. Typical illnesses covered by the policy can vary depending on a company, but usually include: cancer, heart attack, stroke, blindness, Alzheimer’s, multiple sclerosis, organ transplants, paralysis. The cost varies with gender, age, smoking status, medical history and other factors. Coverage can vary according to the degree of severity of, or conditions associated with, an illness or disease. Coverage cannot be purchased for a pre-existing condition or illness.
Types of Cover:
Decreasing Term Assurance (Mortgage
Protection)
Decreasing Term (otherwise know as
mortgage protection) is commonly used to
protect capital and interest repayment
mortgages where an outstanding balance
decreases each year. This can be taken out
on your own or jointly with your partner.
The cash lump sum is designed to pay off
the outstanding balance of your mortgage.
Level Term Assurance (Family Protection)
Level Term policies simply pay out a sum
of money in the event of the
policyholder’s death during the term of
the policy. When deciding on a level term
you need to select how much cover you
require and how long for the policy will
cover you. The sum insured remains the
same throughout the whole term of the
policy.
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