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Guide to Expatriate
Life Insurance
Number One- Think Protection Then Investment - alas life insurance
is something that most of us would rather not think about.
Unfortunately it is something that we need to consider, particularly
if we have dependents, or outstanding finance commitments or a
mortgage or a property that would result in financial hardship for our
families if we were no longer around to provide an income to meet
payments. Let us start off by dealing with the confusion relating to
the differences between life insurance and life assurance, well there
isn’t any, insurance tends to be used for general insurance products
such as motor &
home insurance
uk and assurance tends to be used to
describe the various forms of life insurance. I try to think of the
two as insurance being cover something that may happen and assurance
against something that will happen (although not always within the
policy term)
Life insurance is all about death, regrettably we all have to die
sometime and by insuring our lives against death, we can help
alleviate any financial hardship that may befall our loves ones. Life
insurance is designed to provide a lump sum payment in the event of
the policyholder’s death. This sum insured as it is known, is usually
chosen by the policyholder and is paid out before the expiration of
the policy. This simplest form of life cover is called Term Life
Assurance. At the end of the policy terms if the policyholder is still
alive, generally there is no payment at all. In simple terms this type
of Term life insurance is used to safeguard a loan or a mortgage.
Mortgage.
Say you are married with two small children and you have just taken on
a new mortgage of £150,000 to be repaid over 25 years. The mortgage
provider will want you to provide some security for the loan and this
is done by means of a term life insurance policy. At the end of the 25
years when the mortgage is paid off, the policy will expire. The sum
insured must be maintained at £150,000 throughout the period of the
mortgage if you are repaying on an interest only basis. If you have a
repayment mortgage whereby the amount owed reduces each year, you
could consider a decreasing sum insured term life insurance policy
whereby the sum insured decreases in line with the actual amount owed.
In the above example, a sum insured has been picked to cover a
mortgage although in practice most people want to choose a higher sum
insured so as their dependents will be left a sum of money in the
event of their death. The ability to purchase term life insurance
depends on a number of factors, your age, whether you are a smoker or
not and if you have any pre existing medical conditions. IN some
cases, usually because of sum insured, the life insurance company may
want you to attend a medical before they provide you with term life
insurance cover. Term Life Insurance is available from a number of
insurance companies and at Assetsure; we have a separate life and
pensions division that will only be too pleased to discuss your
requirements with you.
What are the
main types of Life Insurance?
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