Life insurance is probably not a policy you want to really give a lot of thought to - let's face facts - the thought of your death is pretty morbid.
Unfortunately - when you have loved ones that depend on you, life insurance is worth thinking about.
Essentially a life insurance policy is there to help financially support your family after you pass away - especially important if you're currently the main source of income for the household.
A life insurance policy can cover a range of financial aspects, including mortgage repayments, funeral expenses and other unexpected costs that may crop up after you die. Let's take a quick look at the essential components of a life policy:
Taking out a mortgage on a house or flat is a significant, life changing commitment for many of us.
Mortgage cover is probably the most important aspect of your policy as the cost of a mortgage is usually a fairly hefty debt and likely to be the largest loan you have or are likely to have.
As a result financial protection for your family is important as it will help to ensure that they can continue to re-pay the debt should you unexpectedly pass-away.
Essentially it keeps a roof over your family's head even if you're no longer around, without concerning themselves with how they will repay the mortgage.
Critical Illness Cover
Critical illness insurance basically covers you should you be diagnosed with a critical illness such as cancer, a stroke, a heart attack or coronary artery by-pass surgery.
Other illnesses may be covered as well (such as Alzheimer's disease, Parkinson's disease, kidney disease and HIV/AIDS) but this is down to the terms of the policy and is worth checking with the insurer.
Essentially the money can be used to pay for the cost of care and treatment, recuperation aids and replace any lost income incurred due to a reduced ability to earn or lifestyle changes.
Income Protection / Permanent Health Insurance
An income protection insurance policy is there to supplement your salary in the event of a serious illness or incident that leaves you unable to work.
This income is paid up until the day you would have retired, however the plan can be written to any age before state pension age if required. As a result the regular payments will cover you and your family's living expenses in combination with any state benefit you receive.
All of these policies tend to be combined for the majority of people, however it is dependent on individual circumstances - advice and consultancy with a qualified life insurance expert is recommended before buying to understand which aspects you require and exactly how much cover you actually need.