Life Assurance - how does it work?

There are many different types of life assurance. Basically, the main purpose of life assurance is to provide a sum of money to your family in the event of your death.

The main reasons for taking out a life assurance policy are to assurance a mortgage, or to provide security for your family after your death.

Types of life assurance

• Mortgage protection
  This type of life assurance is designed to provide assurance for a specific period (the mortgage term) and will reduce in line with the mortgage balance
• Term assurance
  This type of life assurance will last for a specific period and provide a level (or increasing) level of benefit. This could be used to provide a lump sum for you family after your death, or to assurance an interest only mortgage.
• Whole of life
  This life assurance will provide assurance for all your life until your death. This can mean that this type of assurance may be more expensive than other forms.

There are other forms of life assurance available under an endowment policy or a pension plan, but those listed above are the main types available today.

When you take out a life assurance policy, you will be able to select the level of assurance that you require. The premium will reflect this, as well as your age, sex, and health history. So long as you maintain your premiums, the benefits will be paid out tax-free (in most cases) on your death. You can take out a policy on your own life, or with your partner. You may also combine some forms of life assurance with critical illness assurance.

Woodruff Financial Planning has access to all the major insurers on the market. This means that we should be able to find you the most competitive policy for your individual circumstances. To find out more about life assurance, or to obtain a quote, please contact us.