Life Term Protection
What you need to know
Life Insurance can play a vital role in planning for your future. To give you some guidance, we decided to take a look a some of the different policies you may consider getting for yourself or a loved one. Terms and conditions apply to all of the benefits we will list and you are advised to check the customer guide of your chosen insurance company for full details.
What is Term Protection?
Term protection is a fixed amount of life insurance over a specified period of time. If you die during this time the policy will pay out a lump sum as specified by you. It is designed to provide a lump sum payment to help to financially protect your dependants against the loss of income into your household as a result of your death. The premiums on a term protection policy will be fixed for the term of the plan provided you have not chosen to index linked your policy. In other words, if you take out a policy worth €100,000 for 20 years and you die within that time period, €100,000 will be paid out to your family to help them financially, assuming that all premiums have been paid up to date at the time of your death.
Some insurers offer additional benefits with their term protection policies. Some come as a free benefit under the plan while other benefits will come at an additional cost.
These are the most popular additional benefits that you can add on to your term plan:
Specified Serious Illness Cover
If you wish you can add on a specified serious illness benefit to your policy. This means you will be paid out should you be diagnosed with one of the serious illnesses listed on the policy. Specified serious illness cover can be one of two things. It can be a stand alone benefit in addition to the life cover amount. Alternatively, you can get an accelerated policy so that the serious illness cover is added in such a way that any claim under the illness cover will be paid from the life cover amount.
Most insurers include children’s life cover with the term life plan at no additional cost. It covers all dependants of the insured and pays out a lump sum to cover funeral costs etc. It covers the child until they are 18 or 21 if in full time education. Certain life insurance companies may also cover children under their parent or guardian’s serious illness policy.
Terminal Illness Cover
Many life insurance companies will include terminal illness cover on your policy free of charge. This means that in the event you are diagnosed with a terminal illness and have less than 12 months to live, the insurer will pay out the full amount of life cover to you early.
This benefit gives you the option to increase the level of your cover or serious illness cover without producing more medical evidence. This benefit may be used if you get married/enter into a civil partnership, the birth/adoption of a child or you have an increase in your mortgage.
Inflation or the rise in cost of living over the years can diminish the value of your sum assured. €100,000 today won’t have the same value as it will in 30 years time. Adding inflation protection to your policy will help protect against the negative effects of inflation. Your premiums and sum assured will increase with the inflation rate to help protect the real value of your cover. Each life company offers this benefit at various rates.
Convertible term provides you with the option of continuing on your cover before it is due to expire without the need to provide any further medical evidence. Usually you must enact this option before you reach the age of 65. Whilst you are guaranteed to get the cover again you will be re-priced at your age at the time. Most people at this age will decrease the level of cover that they have.
For more information or to get a quote for term life insurance give us a call on 01 400 3434 where are team would be happy to go through your options!