Ten Things You Should Know About Life Assurance

1. The primary motivation for purchasing life assurance is to insure that your loved ones are cared for in the event of your death.

2. Life assurance policies are calculated by underwriters who determine the amount of money needed to replace your income in the event of your death.

3. Life assurance is usually purchased to cover the cost of mortgage re-payments, and other bills, in the event of the death of the people responsible for paying the mortgage; special polices exist whereby the premium costs reduce as the outstanding mortgage amount reduces, these are known as Mortgage Life Insurances.

4. Insurance policies vary their premium rates for the maintenance of the policy, and the amount payable following death or termination of the contract (the sum assured), depending on certain characteristics of the policy holder(s)- including age, sex, health and occupation.

5. Three types of life assurance policy exist; Term Assurance is a contract which lasts for a fixed term and aims to provide financial protection against death; Whole Life is akin to making a financial investment, a premium is paid at specific intervals and is designed to provide the sum assured in the event of death or at a specified later date; Endowment Assurance is similar to whole life assurance, however, these polices mature, meaning that after a specified time the sum assured is payable whether or not the policy holder(s) have died. For both the latter types of assurance, there is an option to surrender the policy at anytime in order to receive a lump sum, the amount of which will be determined by the length and amount of the premiums thus paid.

6. Life assurance is very difficult and expensive to obtain after the age of 70; usually, the older you are the higher your premium rates will be.

7. Generally, individuals who smoke are offered very high premiums; this is because smoking is considered to be very high risk.

8. For a sum assured to be paid out to an individual in the event of death, the policy must be active at the time of the event.

9. Many assurance policies offer Terminal Illness cover, and will pay-out in the event of terminal illness, once a doctor has certified that death is expected to occur within 12 months.

10. The minimum term for a life assurance policy is normally a period of 2 years, although most policies last for between 20-25 years or more.

Life assurance should be considered as a necessary feature of your financial arrangements, they will provide you with the peace of mind that your family will be looked after in the event of your death.