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Life Insurance

Life insurance and Critical Illness - Most of us have heard of Life Insurance and appreciate that it is a policy provided by an insurance company, that pays out either a lump sum or a series of payments when you die. These payments are normally paid without the deduction of any tax, and in most instances are tax-free.

The proceeds of a policy can used:

to pay off a debt such as a mortgage
to provide an income for your dependents
as a savings scheme.

Life policies can be combined with other forms of cover, such as Critical Illness Insurance so that you receive the lump sum if you are diagnosed with a serious illness.

Critical Illness Cover

Critical illness cover normally pays a lump sum if you are diagnosed with one of a number of specified ‘critical’ illnesses during the term of the policy. There may be a requirement that you survive for a period of 28 days following the date of diagnosis for the policy to pay out, as the policy is intended to cover living expenses.

You could use the cash payment from a policy either to pay off a debt (such as a mortgage) or to provide you with an income if you become too unwell to continue working.