There is no simple answer which Life Insurance is best for any individual. The answer depends on what you want the Life Insurance for. This page gives a few simple scenarios and gives information that will help you choose the right policy for you. If you are not sure what is best for you, then seek advice from a Financial Adviser.
I have a mortgage and want it repaid on my or my partner’s death.
If you have a capital and repayment mortgage, then the best form of policy is a reducing term insurance policy on either your own life, or joint lives payable on the first death of you and your partner.
I want money for my family if I or my partner dies
A Term Insurance policy is probably the best in if you want a lump sum paid out if you die. If you want a policy that pays out on the first of you and your partner to die, then a joint life policy is the most suitable.
If you a regular income to be paid instead of a lump sum then a Family Income Benefit policy will be more appropriate.
I am over 50 and want to leave some money to cover my funeral costs
If you are in good health then an over 50 Life Insurance policy that is underwritten will be cheaper. If you have medical conditions that could increase the premium payable, then a policy that guarantees acceptance is probably more appropriate.
I want to have a lump sum if I suffer from a serious illness
If you want a policy for a specific term, then a Critical Illness Term Assurance policy will be most suitable. An alternative is Whole of Life policy that is for Critical Illness.
It should be noted that no two Critical illness policies cover the same conditions and not all conditions are covered, so looking at the policy summary is essential.
I want to protect my income against long term illness
The most appropriate policy is Income Replacement cover (Permanent Health Insurance) that will pay out a regular a sum until you are able to return to work or reach the end of the term, typically 60 or 65. Some policies will cover you for your own occupation, whereas other will only cover your own occupation for a specific period, than will only cover you if you are notable to work in any other occupation. Care is needed to ensure that you get the right cover.
Some of these policies will only pay the income for a specific period (typically 2 or 5 years). These polices are usually less expensive than ones that cover you until you reach the age of 60 or 65.
When both my partner and I die I want a lump sum available to pay Inheritance Tax
Probably the most appropriate policy is Whole of Life assurance policy that pays out on the second death of you and your partner. This type of policy may have an investment element that means premiums do not have to be paid after a certain age.
This article is for guidance only and must not be construed as advice. The contents of this article are aimed at the UK market, although many countries will have similar policies available. If you need advice you should refer to a Financial Adviser.