Lockhart Grey Financial Planning Ltd

Life cover is a way of helping to ensure that your dependants are financially provided for if you die or are diagnosed with a terminal illness. The benefit amount can either be level, increasing or decreasing term assurance depending on your personal circumstances.

Level Term Assurance – which provide fixed premiums for a number of years and a full payout on claim at any point during the term.

Increasing Term Assurance – where the cover increases every year without the need for a medical. Not as popular as Level Term, but it should be as people may require additional cover in line with increases in their income and inflation.

Decreasing Term Assurance - where the payout reduces over the cover period at a flat fixed rate each year.

You can choose between:

- Life Cover - can pay out a cash lump sum if you die or are diagnosed with a terminal illness within the policy term.
- Critical Illness with Life Cover – can pay out a cash lump sum if you are diagnosed with a critical illness, if you die or are diagnosed with a terminal illness, whichever happens first within the policy term.
- Lifetime Cover – can pay out a cash lump sum when you die, or if there are two people covered, when the last person dies.

Do I need life cover?

There are several reasons why life cover may be important to you.

If you die or are diagnosed with a terminal illness it can help:

• provide for your partner, family or dependants
• pay off your mortgage or other outstanding loans

How does life cover work?

Each month, you pay an amount for the period you have chosen to be covered for. The cash sum you are covered for is known as the benefit amount, your monthly payment is known as a premium and the period you’re covered for is known as the term.

The policy will end if the provider pays out the benefit amount. If this amount has not been paid out by the end of the term, the policy will end and you will get nothing back. The policy has no cash-in value.