What is life insurance, critical illness insurance and income protection cover?

Life insurance (also known as life assurance, term insurance or term assurance) is a simple way to protect your family financially in the event of your death. If you die during the term of the policy or suffer from a terminal illness then the policy will pay out a lump sum of money to your family or nominated beneficiaries. You can see more in FAQs, or view the video.

Critical illness insurance is an insurance plan that will pay a tax free lump sum on diagnosis of a wide range of illnesses and help redress financial hardship and the effects a serious illness would have on your income. The lump sum is normally payable if you survive for a period of more than 28 days after being diagnosed and can be used for anything you like, such as nursing care, home-help, adapting your house to accommodate a disability.  Also, it could pay off your mortgage or give you a holiday to recover from treatment. This policy is sometimes called ‘living insurance’ because the benefit is paid out on diagnosis irrespective and often the applicant can make a full recovery. You can see our video on critical illness cover here.

The range of illnesses covered does vary by provider so selecting the coverconditions is paramount to selecting the provider; the confusion of which product covers and pays out what amount should only be selected with proper
regulated advice. Choosing the right policy isn’t just important – it’s CRITICAL. Er, excuse the pun.  You can see more in FAQs.

Income protection plans are designed to provide partial income replacement in the event you become unable to work due to illness or injury. Typically the benefit can be up to a maximum of 60% of your monthly salary.  The two most common causes of claim are stress and backache, both of which can lay people off work for an extended period.  According to insurance company research 1 in 5 adults will be off work for more than 6 months before they reach the age of 65. You can see our income protection video here.