LIFE INSURANCE Policy IN THE UK
Life insurance is a contract sealed between a policy owner and an insurer with the aim to insure a third party, often called a beneficiary; in case of death (suicide is usually excluded). The purpose of this contract is to provide pecuniary security to the beneficiary. Oftentimes, the policy owner and the beneficiary are the same.
For example, they are the same person if one pays for one’s own insurance. But there are cases in which the beneficiary is not legally involved in the contract that is when an individual insures himself in order to help a third party (relatives). In this case, relatives benefit from the insurance, whereas the insured pays for the insurance and is the policy owner.
Needless to say, many people prefer no to think about life insurance because this triggers negative feelings. In the UK, it is estimated that almost 28 million adults do not have a life insurance policy, either because they think it’s too complicated or because they avoid tackling the imminent problem of death. But a more down-to-earth approach to life proves us that with little effort and money one can save the closest ones from a financial crunch in the case of an unwanted event.
There are different types of life insurance, depending upon the insurance company and upon a set of determinants (such as age, health and lifestyle). Generally, the most common type of life insurance is the term insurance policy. It is usually taken by people who are married and/or have offspring. This type of insurance has the role of protecting one’s family from debt. The term insurance has a limited viability period. Most of the times, it is taken by those who have a mortgage and its period is as long as the mortgage’s, in order to protect it. If one dies before the period expires, the term insurance cover assures that the mortgage will be paid on.
Another well-known type is the permanent life insurance. This type of insurance is also divided into four subtypes: whole life insurance, universal life insurance, limited pay and endowment. This insurance is costlier than the former type, because the owner only benefits from it if he/she pays all premiums until the policy expires. Its value is built up in a wider time span. The main purpose of permanent life insurances is to pay taxes or mortgages if heirs are not yet financially stable.
Last but not least, life insurence policy can also be granted in case of terminal illness or critical illness, as this brings about uncertainty to the insured individual’s condition. This type of insurance is called the terminal or the critical illness insurance and is tailored for those who face an illness that makes them incapable of working and paying their debts, taxes or medical costs.
It’s very easy now to buy online life insurance plan, simply compare online life insurance quotes and you can buy online life cover in few minutes.
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