Online Life Assurance
A life assurance company is an organisation that sells insurance products to either a consumer or to a company (or to both). In many cases the life insurance company may only sell life assurance products, but, in other cases, they may also sell a range of other insurance policies such as car insurance and house insurance.
This kind of assurance company basically sells you a policy that protects you in case you die. You commit to paying premium payments to the insurer you choose (most generally every month) while your policy is in force. These payments will buy you a specific sum of insurance cover. In return, under certain conditions, they commit to paying out this specific sum to your next of kin in the event of your death.
The average life assurance company will offer two kinds of policy from which you can choose. The first is term insurance and the second is whole of life insurance. Both work in the same way in some ways, but there are key differences between the two.
Let's look at term assurance first of all. This kind of assurance policy will only last for a set number of years (hence the name 'term' that is attached to it). When the term runs out, then the policy will be automatically ended. So, your policy cover from the company will therefore end at that point too - i.e. no payment will be made once your term has run out. You'll be fully covered while the policy is active, but will have no cover at all once it's finished. This option is quite popular because it is one of the cheaper options on offer from the average life assurance company.
Whole of life cover, on the other hand, does not end in the same way. You'll still get a payment made if you die - but you're guaranteed a payment with this kind of policy whenever you die (hence the name whole of life). So, you'll pay for this policy literally until you die when your next of kin will then be given their policy payment. This kind of policy is generally more expensive than a term policy as the insurer knows that they will have to make a payment at some point.
The life insurance and critical illness insurance sector is incredibly complex - unfortunately, the information you've just read is just the tip of the iceberg when it comes to making a choice of life assurance company and a suitable policy. There are a lot of other issues that you need to look at before you buy any policy.
For example, how much cover will you actually need? Should you look at decreasing term or even increasing term? Can you take advantage of inheritance tax breaks with a whole of life policy? There are a lot more questions to be answered here. And, it's important to get them all answered correctly - your aim here should be the right kind of cover at the lowest possible cost and you'll only get there if you know what you are doing.
Alternatively, of course, you could talk to us and simply tap into our expertise. We can help you make the right decisions on the life assurance and critical illness policy and life assurance company that you choose. And, as experienced brokers, we can also make sure that you are given the most cost effective quotes on the market. So, you'll be able to get it right and to get it as cheaply as possible.
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