What is Life Cover?

It is easy to think that you will always be there to take care of your family, to protect and provide for their needs - but unfortunately, it is something you cannot guarantee.
But you have the option to help secure your family's financial future - and by selecting the right life protection you can help protect your family's future.
Life Cover is designed to help protect the people that matter to you most, by ensuring financial help to them if you were to die or be diagnosed with a terminal illness. The cover will generally pay out a cash sum (the 'sum assured') in the event of your death or diagnosis of a terminal illness during the period of cover.
Life Cover policies are designed to suit your specific requirements in terms of covering outstanding and ongoing financial commitments, whether it be to pay your mortgage balance, or to help with monthly bills and other ongoing payments.
Life Cover is the sensible way to prepare for the unexpected and helps to give you and your family the peace of mind to relax and enjoy life.
There are two main policy options that provide Life Cover. These are Family Life Assurance and Mortgage Life Assurance and they are explained below.

Family Life Assurance

Family Life Assurance is a way of providing financial protection for your loved ones against the financial outcomes of an unexpected death.
There are various types of policies available that can be chosen for your specific needs. The amount of cover you need should take into consideration any financial commitments there may be, such as mortgage payments, loans and other regular expenses. You may want to seek advice from an Interfinancial broker on the different policy types and benefits available before applying for cover, to make sure the plan you choose meets all your needs.

Benefits of Family Life Assurance

Such cover can help to protect the financial security of your family and their future.
You can arrange cover on a single or joint basis with your partner.
You can arrange cover to pay out a one off lump sum or a monthly benefit known as Family Income Benefit (explained below).
Family Income Benefit
Family Income Benefit (FIB) is a term insurance that, in the event of a claim, pays out a regular income for the remaining term of the policy, instead of a 'one off' lump sum.
It is used to provide financial security covering regular financial commitments, including ordinary everyday living expenses, until a fixed point in the future.
The policy is available on a joint or single life basis and you can choose whether to include Waiver of Premium (subject to eligibility).
Example: A couple both aged 35 years old with a mortgage, additional monthly commitments of £1,000.00 a month and a 6 year old child might take out an FIB policy, alongside their mortgage protection policy, for £12,000 a year over a 15 year term to provide cover until the daughter is 21 years of age.

Mortgage Life Assurance

There are generally 2 main types of mortgages. They are:
Interest-Only. With this type of mortgage the outstanding balance remains approximately the same throughout the mortgage term. This can be protected by Mortgage Level Life Assurance, which provides an amount of life cover that remains the same throughout the term.
Capital and Interest (Repayment). With this type of mortgage the outstanding balance usually reduces each year. This can be protected by Mortgage Decreasing Life Assurance, which provides an amount of life cover that will decrease over the policy term, approximately in-line with your mortgage balance.
If you choose the right cover to match your mortgage and you die during the policy term then the cover will pay out a lump-sum to help pay for the outstanding mortgage balance.

Benefits of Mortgage Life Assurance

This cover will help provide for the repayment of your outstanding mortgage balance to help secure your family's home.
You can arrange cover on a single or joint basis with your partner.
You have the additional option to select Critical Illness Cover and/or Waiver of Premium (explained below)

Critical Illness Cover

Critical Illness Cover provides a tax-free lump-sum on diagnosis of a specified critical illness, and then it is for you to use as you wish.
It is an option that can be added to your Family or Mortgage Life Assurance cover and provides you with added protection if you were diagnosed with a critical illness. The financial support you receive from the cover will be an immense help towards the mortgage and household bills. It could also be used to modify the home or employing a carer. All you need to do is decide on the amount of cover you are likely to need.
In the event of a critical illness claim you will receive the agreed cash lump sum and your plan will end.
An extensive list of critical illnesses can be covered, please speak to an Interfinancial broker for more details and to make sure you get the level of cover you need.

Waiver of Premium

Waiver of Premium is an option that can be added to your Life/Mortgage Assurance to protect your policy premiums.
This additional cover means that your insurer will take over your monthly policy payments 26 weeks after you become unable to work through an illness or accident. So for periods of long disability or illness, your cover will continue. When you are deemed fit to return to work, you will be responsible for paying the premiums again to continue your cover.

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