What is family protection insurance?
Life insurance – also known as family protection insurance – is a type of insurance which is designed to protect your family from the worst should you pass away. Money can’t stop grief, but it can remove additional financial stress at a tragic time in your family’s life.
Family protection insurance is a life insurance which pays out a lump sum or specified income on the death of the policy holder. This gives a financial buffer to your family members, giving you the peace of mind that they are free from financial strain. A family protection policy could pay for school fees, or pay off a mortgage.
You might feel the added need to take out life insurance when you buy a home, become a parent or become a grandparent. Losing someone close to you can also act as a wake up call to remind you to invest in family protection insurance.
How much cover do I need?
The amount of cover you need will depend on:
- How much you can afford
- Whether you have any other cover (such as a policy from your employer)
- The number of people relying on you for financial support
- The size of your mortgage
How much does a life insurance policy cost?
Insurers have to allow for a number of risks when setting the cost of a policy, including;
- The age of the policy holder
- Any poor health
- A dangerous job
- Any dangerous hobbies
These factors can increase the risk for an insurer and therefore will increase the cost of the premium.
What types of family protection insurance are there?
- Whole of life assurance – this pays out with no set period to when you might die
- Term insurance – only pays out if you die within a set period
- Terminal illness – to claim if you have a fatal illness
- Joint life insurance – this can be cheaper and is convenient, but it only pays out on the first death
- Waiver of premium – cover for when you are unable to pay your life insurance premiums because of illness or injury
- Critical illness – you get a lump sum if you get one of the serious illnesses that the policy lists
Other health insurance information: