Life insurance could provide your family with a mortgage/rent-free home, an income stream to cover all bills and expenses while your children are growing up and a university fund.
Whole Of Life and Level Term cover are the two main types of life insurance. Today we review both covers to help you understand which is best for you.
Whole Of Life Insurance
With whole of live cover, as long as you keep up with the payments, the guaranteed sum insured is paid out whenever you pass away. Consequently, whole of life cover is the most expensive type of life insurance.
- Why is Whole Of Life cover the most expensive type of life insurance?
Whole of life cover is the only type of life insurance policy that will guarantee to pay a lump sum on your death. This is because it is the only type of policy that guarantees to remain in force (providing you continue to pay the premiums) for the rest of your life.
- How does whole of life cover work?
An agreed proportion of your monthly premiums are invested by the life insurance company, the returns help to fund the final pay out. It is for this reason that both the monthly payments and the amount your family will receive when you pass away are subject to review and change.
Level Term Insurance
Level Term cover is perhaps one of the most straightforward types of life insurance available. The sum and period you’re insured for won’t vary during the term of a Level Term policy.
- How much does it cost?
The price of life insurance depends on your age, level of health and profession. The price of Level Term Cover also depends on how long and the amount you wish to be covered for.
- How does level term cover work?
Level term cover can cover you for the term of your mortgage and beyond. However, the policy will have a fixed term and once the term has expired, your policy will be cancelled. If you still require life insurance at this stage, you will need to consider that you will be older and you may have health issues that could increase your premiums when purchasing a new policy.
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