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Whenever insurance or financial protection is mentioned, what do you think of? Your car perhaps? Your house? Maybe it’s your possessions. Those are the things that usually come to mind – and you’ll probably have some sort of cover arranged for them.

But what about the people you care about? Your family and the people who depend on you. What would happen if an accident, illness or even death meant they couldn’t rely on your income to pay the bills? Would the mortgage repayments be made each month? Would your home and your family’s happiness be at risk? Not if you make the right preparations.

But how do you go about making those preparations? How can you protect the lifestyle you’ve worked so hard for?

Which type of cover do I need?

Life insurance, or life cover, as it is also known is available in three different forms. Term Assurance policies pay a tax free lump sum should you die at any time during a fixed policy term. The, second type is Decreasing Term Assurance. This type of life cover decreases in line with your mortgage and in the event of death during the fixed policy term will also pay a tax free lump sum. What life insurance could do for you depends largely on the financial arrangements you make for your dependents. For example, your partner could use the lump sum to pay off a debt such as a mortgage or use the money to provide an income. The third type, Whole of Life Insurance guarantees to pay out a lump sum (the sum assured) when the policyholder dies, provided the premiums are maintained.

*Source: National Statistics online