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LIFE INSURANCE

Life Insurance is a contract between you and an insurer. It could pay out a cash lump sum if you were to die during the term of the policy.

It is a pure insurance contract so there is no pay out if a claim is not made, and the policy ceases at the end of the designated term. It can be set up in single names or joint names, and the sum assured is determined by you. Premiums are paid on a monthly basis by direct debit.

 

There are a few different ways that cover can be set up.

• A decreasing lump sum will pay out less and less over time. People usually choose this option to cover the remaining balance on a mortgage which will be reducing as time goes on. 

• A monthly income If you want your family to receive a monthly income for a period of time rather than a lump sum. You can opt for the amount to be level or increasing.

• A level lump sum will pay out the same fixed amount no matter when the claim is made

•An increasing lump sum grows by the rate you’ve chosen, can be a set amount or in line with RPI depending on the insurer.

 

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SINGLE OR JOINT POLICY

For a couple you can take single or joint life policies. With single life cover you each have your own plan so if one policy is claimed upon the other remains in force. So if you were both to die there would be two pay outs.

With a joint life plan you can insure yourself and your partner together and the policy will pay out just once, when the first person died.