Taking out insurance never seems like an easy task, and you can never be sure whether you are getting the right deal. However, using an insurance broker like Caspian Insurance can help you to find the right policy for the right price.
If you are new to insurance and are not familiar with taking out policies, here is a guide to three of the most popular types of insurance that you can take out to protect yourself, and your families future.
Life insurance can be a rather broad term, with different types of cover available depending on your needs. Whatever policy you take out, life insurance is designed to provide a financial lifeline for your loved ones in the event of your passing.
Life insurance policies can pay out a lump sum, or regular instalments if you pass away, and can help ensure your family are able to deal with financial worries or strain at a difficult time.
You can choose from two main types of life insurance; level term and decreasing term. Level term is very simple and works on a fixed basis. You can choose the term and the premiums are usually quite low. This is because if you pass away after the term ends, there is no payout. This is important to remember.
Decreasing term life insurance is also known as mortgage life insurance. It is designed to help your family pay off the mortgage if you pass away. This type of insurance is common when you buy a mortgage, and can be used to pay off a repayment mortgage. This type of life insurance will decrease in line with your mortgage.
Income protection insurance
An additional type of insurance you can take out in order to protect you and your family is income protection insurance. This is one of the most claimed policies on the market and covers a broad range of physical and mental health issues.
Income protection insurance is helpful in replacing a percentage of your salary; usually 55%-60% of your annual pay. It can help to provide a type of sick pay if you are unable to work due to an illness or injury. You can also claim multiple times which can be a great benefit.
It is important to check on your policy what conditions are covered and familiarise yourself with your policy document.
Critical illness cover
The third popular type of insurance is known as critical illness cover. If you become ill and are unable to work, the financial impact on your family can be devastating; for example, if you are diagnosed with a critical illness or you need surgery.
You can buy critical illness cover alongside life insurance as additional cover. It is very important to understand what is covered in your policy; make sure you are familiar with which illnesses or stages of illnesses are covered.
Taking out critical illness cover can help to replace your income or to pay medical bills if needed, especially if you do not have ample savings to help you through a financially difficult time.