What type of life insurance is right for me?

Tuesday, January 12, 2010

Too many people do not do take the necessary research steps when embarking on choosing the type of life insurance that is the best fit for them. In order to best benefit loved ones, it is important to take different things into account and thoroughly consider them. There are basically three different types of life insurance that people are presented with during the initial choice phase.

Level term life insurance

This basically serves to ensure the customer a lump sum payment should a claim be made at any time during the set period chosen or the term of the policy. These are the most expensive but ensure the greatest coverage due to the fact that if you insure yourself for £150,000 for a term of 25 years and a claim is made at any point during those 25 years, the policy promises to pay out the entire £150,000

Decreasing term life insurance

This is a less expensive option to the level term policy because the amount of the possible claim decreases as the customer’s debt decreases. With a level term policy, there could be excess once debt is paid off but with a decreasing term policy the claim is only intended to pay off debt.

Family Income Benefit

This sort of policy ensures an income for the claimant’s family from the time of the claim until the end of the policy. In addition, these tend to work out less expensive than the level term policies because of the fact that the amount of the claim decreases with every passing year of the term. If the aim of the policy is to ensure £50,000 a year over ten years, one must originally ensure themselves for £500,000 but with each passing year it will decrease by £50,000 until the term runs out.


Sonia Gibson