Life Assurance - www.assurance.uk.com

Most financial institutions offer lifetime protection plans. These plans are designed to help you and your family if one of you falls seriously ill or dies.

There are 4 possible plans available that an individual could consider. These are:

Life assurance cover – when a guaranteed amount of money, a monthly income or even both are paid out when a member of the family that is insured dies or is diagnosed with a terminal illness.

Critical illness cover – when a guaranteed sum of money, monthly income or both are paid to the family when the insured has been diagnosed with a critical illness.

Life assurance cover plus critical illness cover – when a guaranteed amount of money, monthly income or both are paid out on the earlier of the diagnosis of terminal/critical illness or death. Terminal illness is when the insured persons has no longer than 12 months to live.

Life assurance cover plus total permanent disability cover – when a guaranteed sum of money, monthly income or both are paid out to the family on the occurance of a death or the diagnosis of an illness or total permanent disability.

These plans can be taken out for both single life and joint life cover. The single life basis is when only one individuals life is covered with the plan. The joint life is basically when two individuals are covered and the insurance company pays the money on the initial claim made against either life.

When someone is applying for a mortgage in order to purchase their own home, alot of mortgage lenders will insist that they have life assurance protection. This is essential as if the mortgage payer falls seriously ill or even dies, then they will need this cover to ensure that their family are not left homeless. There are two different types of cover for this which will vary with the different forms of mortgage that are available. The sum of money that the family will receive is created so that your outstanding mortgage payments ill be paid off.

With a capital and repayment mortgage, the loan amount will decrease throughout the mortgage term. Based on this, the mortgage protection supplied will be that that will cover the borrower for a decreasing sum of money. If the borrower dies or is diagnosed with a critical illness, then the insurance will pay off any remaining mortgage payments that are outstanding. At the beginning of the protection plan, the insured will set a guaranteed sum of money to be paid out on their death or diagnosis of a serious illness. These payments will be highly competitive and will be guaranteed to not increase within the plan term. The sum of money will decrease each year by a pre-set value. It would cover the outstanding mortgage loan as long as the mortgage interest rate does not exceed the current assumed rate which is about 10% per year.

If the insured has an interest only mortgage (for example an ISA mortgage), they will be able to choose a level protection cover. The amount paid out on the death or diagnosis of a terminal illness of the insured will be guaranteed. This amount as well as the payments will stay the same throughout the term of the protection plan. The guaranteed sum will be used to pay back the mortgage of the insured if they die or become seriously ill.

The payments of all life assurance plans, if they are for longer terms than 4 years will be taken by direct debit of possibly by a cheque payment once a year. With plans that are for 4 years or less, they will have to be paid in one single outright payment.

As there are a great number of different plans available, the individual should consider speaking to a financial advisor first so that they can advise them on which plan is best suited to them. They will also advise them on which additional benefits, if any to choose, how much cover they will need, discuss how much they can afford to pay as well as answering any queries that the potential customer may have. Once the individual has spoken to the adviser they will have a better knowledge of what type of plan they want and be able to apply for the correct type for their needs.