Types of Life Insurance
Life insurance is not just life insurance. Life insurance is actually a whole collection of different types of insurance gathered under the one title. So, while you may think you don’t need standard life insurance, or that you already have it, there are other types of cover you may want to consider.
Standard Life Insurance
This is the type of insurance most people think about when they see a life insurance commercial on TV, or someone brings it up in conversation. Standard life insurance offers a lump sum payout if the insured party dies or becomes terminally ill. This payout can help cover unpaid debts, funeral costs, or it can help cover the day-to-day expenses, to allow those left behind more time to adjust without having to worry about money.
The cost of this type of life insurance will vary according to a number of factors. If you are older, your premiums will usually be higher. The same applies if you have a pre-existing health condition, a dangerous job, or you are a smoker. You can click here to get started with a quote.
While you can get standard life insurance that offers advanced funeral expenses payouts, it can be a good idea to invest in standalone funeral insurance. This type of insurance offers a lump sum payout promptly, to allow friends and family to organise the funeral without having to worry about where the money is coming from.
Income Protection Insurance
As the name suggests, this type insurance is designed to protect your income. If you become ill or you are injured, you may not be able to work. If your salary is no longer coming in, it could become very difficult to make ends meet. Income protection insurance offers monthly payments to replace your salary, and can help pay for your mortgage, bills, utilities, and any other day-to-day expenses.
You can usually be insured for up to 75% of your salary, and there should be a fair degree of flexibility in your options. You should be able to decide how soon you want the payments to start after you become sick or injured. You should also be able to decide how long you want the payments to last. This could be anywhere between two years, all the way up to retirement.
Business Expenses Insurance
Business expenses insurance works in much the same way as income protection insurance. If you, as a business owner, are unable to work due to illness or injury, you can receive monthly payments to help with the running costs of the business.
Again, you usually have some flexibility with this type of insurance. You can choose a waiting period (how long you wait between becoming sick or injured and when your payments start), typically between two weeks and three months. You can also choose how long you want the payments to last, although it is usually capped at around 1-2 years.
Accidental Injury Insurance
This will pay out a lump sum if you are involved in an accident. The payout will usually depend on the seriousness of the accident. However, it can help to give you the time to get back on your feet without having to worry so much about paying the bills.
Accidental Death Insurance
This works in the same way as an accidental injury plan, but this type of cover will pay out if you die as the result of an accident. The payout will usually be higher, and the it can help to cover the costs of a funeral, and help out financially for those left behind.
While life insurance – or the different types of life insurance – will usually not be a topic of conversation that many people will enjoy bringing up, it does provide an invaluable service. Not many people like to think about their own death, or the possibility of getting sick or injured, but getting cover can provide protection and peace of mind.