Life Insurance and Term Assurance help in North Devon

Eclipse Financial Solutions can help you with Life Insurance and Term Assurance.

Life insurance is all about providing some financial security for people who depend on you if you die. If you don't have a partner, spouse or civil partner, children or other dependents, you may not need life cover.

There are two main types of life assurance, these are term assurance and whole of life assurance. Term assurance pays out only if you die within a certain term and the whole of life assurance pays out whenever you die. Some whole of life policies also contain an investment element to them, but such investment type policies cost a lot more than protection-only insurance.

Term Assurance

This is the simplest and cheapest type of life insurance and is know as term assurance because you choose how long you are covered for, say 10, 15 or 20 years which is known as the term. Term assurance only pays out if you die within the term that you have agreed. If you live longer than the term, you get nothing. As a couple, you can also take out term cover in both of your names, with the policy paying out if either of you die during the term.

• What type of policy do you want? For example
• Family Income Benefit; a policy which pays out an income rather than a lump sum.
• Increasing Policy; where the cover and premium rises over the years.
• Decreasing Policy; where the cover and premium fall over the years.
• Renewable Policies; where you can extend the original term.
• Premiums are usually fixed for the whole term. There are also contracts where premiums are reviewable after a certain period, usually five years.
• How flexible is the contract? Can you reduce or increase cover easily as your circumstances change? Are there extra charges for doing this? Does cover stop immediately if you miss a payment or is there a period of grace?
• By paying extra, you can usually include a waiver of premium. It pays the premiums if you can't work because of a long term illness so that your cover is not interrupted
• The policy can be kept under trust. This means that in the event of a death, the proceeds of the policy are paid directly to the dependents of your choice. Provided a trust is set up properly, there may be benefits to doing this. However, using a trust may not be suitable for everyone and because of the complexities, we recommend that you seek financial and legal advice.

Critical Illness

Pays out a lump sum if you are diagnosed with a critical illness, such as cancer, a stroke, MS, a major organ transplant, coronary artery bypass, heart attack and kidney failure. You can use the payout to pay for medical treatment, pay off your mortgage or anything else.

Whole of Life Insurance

Whole of life insurance pays out an agreed lump sum when you die, whenever that is.

What does it cost?
These policies will cost you more, partly because they will payout whenever the event (death) happens, but also because of the various charges that come with them.The cost also depends on your lifestyle: if you are a smoker and do a dangerous job, you'll pay more than a non-smoking office worker. Life cover also costs more for men because, on average, they don't live as long as women. Always compare what is covered by the policy and not just the price. Some may be cheaper than others but they may not offer the same level of protection.

Payment Protection Insurance

Payment protection insurance or PPI, is insurance that will cover monthly repayments on mortgages, loans, credit/store cards or catalogue payments if you have an accident or sickness and are unable to work, or you become unemployed. This means that the insurance company will pay the monthly repayments (or a percentage of them) on your behalf for a fixed period of time if you become unable to work. It is sometimes know as ASU (accident, sickness and unemployment) insurance. PPI can provide worthwhile cover.