| FAQ - A
jargon free guide to insurance |
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To help you make an informed choice about the type of policy you may need, we have
prepared this 'jargon-free' guide and Glossary of terms used -
we hope that this helps- but if you need more assistance please email us
Q. What is Term Assurance?
A.
Level Term Assurance (LTA) is one of the most popular forms of life
insurance. Level Term Assurance pays out a set amount should the
policyholder die during the policy term.
Q.
Do you receive any money at the end of the policy if you don't die?
A.
No. Term Assurance policies have no surrender value and there is no
money payable on expiry.
Q.
I
want an Interest-only mortgage - can I protect my mortgage with Term
Assurance?
A.
Yes. Level Term Assurance
can be used to protect an interest only mortgage where there is no
Endowment policy in place. Decreasing Term Assurance is mainly used to
protect repayment mortgages.
Q.
Explain Decreasing Term Assurance
A.
Decreasing Term Assurance (DTA),
works as its name suggests where the policy would pay out a reducing
amount throughout the term of the plan and is why it is often used to
protect repayment mortgages. As a repayment mortgage reduces the
balance each year, the level of protection also reduces - hence the
name decreasing term assurance.
Q.
What happens if I stop paying
my premiums?
A.
If you stop paying, your
policy will cease, usually within 30 days of the premium falling due.
You won't be penalised for this, but it is important to realise that
you would then be without the valuable cover your family could benefit
from.
Q.
What is Critical Illness Benefit?
A.
As well as protecting you
against death, some term assurance policies will pay out earlier, or
on upon death when a diagnosis of a serious illness is received. These
illnesses could include cancer, heart attack or permanent disability.
It is important that you ask your Financial Adviser to explain the
different policies from different insurers as their definitions of
critical illnesses may differ.
Glossary
LTA
-Level Term Assurance
Sum Assured - The sum of money that would be payable should a
policyholder die
Term - The term is the number of years the policy will run
DTA - Decreasing Term Assurance
ISA - Individual Savings Account
IFA - Independent Financial Adviser
Premium - The monthly payment for a policy
Critical Illness Benefit - This is additional cover to protect
you in the event of contracting a serious illness.
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