A serious illness or accident inevitably involves radical lifestyle changes. The cost of your mortgage payments, other debts and general family expenses still need to be met, as well as the finance necessary to adapt your home and your car for example.
A capital sum would make all the difference to the quality of life under these circumstances.

Mortgage Protection
A type of Term Assurance policy to provide sufficient cover for an outstanding mortgage in the event of your death. The initial amount of life cover reduces each year so as to closely match the outstanding capital debt on your mortgage.

Level Term Assurance
Level Term Assurance is essentially level life insurance cover restricted to a specific term of years. This means that should you die during the term of the policy, the sum insured (full value of policy) will be paid to your estate.

Neither of these types of policy acquire a surrender value at anytime.

Unit Linked Whole of Life
Your need for life cover is not necessarily going to abate at a specific point in time. A modern Unit Linked Whole Life Assurance normally allows a fund value to be built up and features valuable guaranteed insurability options, not normally available on ordinary policies.

Whole of Life Assurance, can provide life cover without imposing a limited term. A unit linked plan allows the premiums to be kept lower as they are based on the expectation of some future fund growth.

There is a choice between the maximum and minimum levels of cover available at given levels of premium. Standard cover basically allows the same level of life cover to be kept up throughout life, as long as a specified minimum annual fund growth rate is maintained. If this rate is not achieved you will either need to increase the premium to maintain cover or to decrease the level of cover to a sustainable level. Whatever level of initial cover is chosen, that amount is guaranteed to be maintained for a specified term (normally 10 years).

Whole of Life Assurance policies can be written in trust so that the proceeds of the plan are not paid into your estate and will not therefore suffer the delays involved in obtaining probate. They will also escape inheritance tax.

Critical Illness
Rather than take out an ordinary life assurance policy which only pays out the sum assured on death, you can pay a little extra for the benefits of Critical Illness cover.

A very high proportion of people who suffer from problems such as cancer, survive for many years after diagnosis. A critical illness plan will pay the sum assured on diagnosis of specified illnesses. These normally include some forms of heart-attack, stroke, kidney failure, some forms of cancer, multiple sclerosis, major organ transplant and coronary artery by-pass surgery.

A successful claim will usually require the insured to survive the condition for a minimum period of around thirty days.

The plan will also pay out on death, provided the insurance company has not already met a claim for Critical Illness under the policy.

Wide Illness Range
The range of illnesses covered is a very wide one. This is helpful even though the core conditions and permanent total disability benefit should catch the vast majority of claims. You should be aware that AIDS is only covered in certain limited circumstances, if at all.

Permanent Total Disability
This policy offers generous terms for assessing claims in respect of Permanent Total Disability. This means that claims will be met should you become unable to carry out your own occupation through long term illness or an accident. This is a far more favourable basis than for example having to prove an inability to do any occupation. This feature can thus be viewed as a safety net should you be prevented from earning a living by an illness not specifically covered.

Permanent Total Disability / No Age Limit
An extremely important point is that unlike most policies this Permanent Total Disability Benefit continues past your retirement age. The definition of disability is amended at this stage and will then be assessed depending upon your ability to carry out certain activities of daily living. Your Permanent Total Disability 'safety net' is therefore preserved after retirement and can also be thought of as going some way to provide protection against potential care home costs.