The Basics:
Life Insurance is necessary to provide for those who would
suffer financially from your death. It can be designed to pay a lump sum, or a
regular sum over a period of years, in the event of death during the term of the
policy.
Typically, premiums may be guaranteed (for the life of the
policy), or reviewable (subject to increase at regular intervals over the
policy). Whilst guaranteed premiums are usually preferred, reviewable premiums
are cheaper at the outset.
Individuals or couples (joint life) may be the lives
covered. In the case of a joint life policy, the policy may be written on a
first death, or second death basis.
Where increasing cover is needed, this is usually
accompanied by a commensurate increase in premium. Typically, the increases in
both will be a fixed percentage each year, or by reference to an index such as the Retail Prices Index.
Waiver of Premium Benefit is a small side-policy
which will pay your premiums for you in the event of a long-term illness or
disability resulting in your inability to work. There is a waiting period before
this can be triggered - usually 26 weeks.
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