Life Cover - how does it work?

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

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

Types of life cover

• Mortgage protection
  This type of life cover is designed to provide cover for a specific period (the mortgage term) and will reduce in line with the mortgage balance
• Term assurance
  This type of life cover 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 cover an interest only mortgage.
• Whole of life
  This life cover will provide cover for all your life until your death. This can mean that this type of cover may be more expensive than other forms.

There are other forms of life cover 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 cover policy, you will be able to select the level of cover 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 cover with critical illness cover.

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 cover, or to obtain a quote, please contact us.