Life insurance is designed to protect your family financially by paying out a lump sum of money upon your death. It gives you the peace of mind knowing that your loved ones will be looked after if you’re no longer there to look after them. The paid out amount on death depends on the level of cover you purchase.

There are two main types of life insurance:

• A whole-of-life policy: Pays out when you die regardless of age (as long as you keep up with your monthly payments).
• Term life insurance policies: These policies run for a fixed period of time – such as 10, 20 years. They pay out if you die during that time.
• Terminal illness benefit is included for free in almost all policies– If you were diagnosed with a terminal illness (less than 12 months to live) then the policy will pay out early if you wish.

Critical illness cover pays a tax free lump sum of money to you, if you’re diagnosed with a serious or critical illness such as cancer. Most insurance companies cover 40 plus illnesses. A critical illness can affect anyone at any age!

1 in 2 UK people will be diagnosed with cancer in their lifetime – cancerresearchuk.org

If you were to be diagnosed with a serious illness and you couldn’t work would your loved ones be able to cope without your income? Having a back-up plan in place can help support you and your family through what will be a very difficult time emotionally and financially. Most commonly claimed on are Cancer, heart attack , Stroke.

If you couldn’t work due to an accident or sickness you may need to support yourself financially for a long period of time. Income protection protects your income. It pays out a tax free sum of money to you each month if you can not work due to sickness or injury. Generally it will pay out 50/60 percent of your monthly salary.

There are 2 types of income protection:

• Short-term Income Protection will usually pay out for one or two years. After this period you need to go back to work for usually 6 months before you can claim again on it.
• Long term Income Protection will provide a regular income to you right up until you are unable to go back to work (or to the end of your policy)regardless if its 2 years or 10 years that you are off sick for. You’ll benefit most from income protection if you are self employed or if your company does not provide adequate sick pay relief. Most commonly claimed on are Back injury or mental illness.