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Life insurance has been created to solve
the problem of what should happen if the
income of the life assured is lost to
the people they depend on. The type of
life insurance policy that you purchase
depends on a variety of factors. To the
general public, it may seem that choosing
the right protection product is simply
guesswork, but in fact it's quite a complex
process.
Term insurance, as the name implies,
will provide life assurance for a fixed
term. The amount that is assured is only
payable should the person whose life is
assured die during the fixed term. Should
the term assurance policy be cancelled
before the term is completed or matures
at the end of the term without the life
assured dying, no benefit will be payable.
The customer will pay the premiums throughout
the contract term. The best advantage
of term insurance is the high life cover
available for low premiums.
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Just as financially penurious
as death, if not more, is the diagnosis
of a critical illness. Should this happen,
not only is it likely the sufferer will
not be able to work, but they will need
to be looked after, and care is expensive.
Therefore, on payment of regular premiums,
you will be covered on diagnosis of the
illness with a lump sum paid out providing
the illness has been specified and the
treatment is allowed. Critical illness can be added to both term and whole of life policies
in order to make the cover more realistic.
Finally, we look at Key Person or Key
Man insurance, where vital business people
are covered should they not be able to
work. A variety of this is where a major
shareholder or partner's equity is covered
should they die and the remaining partner
or shareholders want to keep hold of the
equity.
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