Life insurance plan cover
What is life insurance plan cover?
A life insurance cover plan is a life insurance product, which will pay out a lump sum to the family of a customer, should the customer die during the term of the life insurance cover plan.
A life insurance cover plan provides your family with financial peace of mind that should anything happen to you, they are still going to be looked after financially, even after you are gone.
How does a life insurance cover plan work?
There are two main different types of life insurance cover plan. The first is a term life insurance cover plan, and this is the cheaper and more popular of the two different types of cover. Term life insurance covers you for a set term, which is usually the length of your mortgage, or until a certain birthday. Term life insurance is rarely offered beyond a customer’s 60th or 70th birthday, so the majority of customers outlive their policy.
A term life insurance cover plan works by taking a monthly premium payment from a customer for the duration of the policy, during which if the customer was to die, the policy would pay out a lump sum payment to that customer’s family.
Whole life insurance works slightly differently and is the more expensive of the two different types of policy. Whole life insurance sees the customer pay over a term, in a similar way to term life insurance, but the life insurance is valid for the customer’s whole life. This means the customer will always receive a payout at some point, effectively guaranteeing a return on their investment.
Whole life insurance is roughly eight times more expensive than term life insurance because the insurance company need to take at least the pay out from the customer during the time they are paying for their whole life insurance to make any profit at all.
Why do I need a life insurance cover plan?
It’s important to have a life insurance cover plan if you have any financial responsibilities that would be affected if you died and were no longer able to earn money. This could include your mortgage, or your family and children.
Life insurance cover plans offer total peace of mind to any family, that they will be looked after should the worst happen.