Life assurance policies are a form of investment designed to benefit a policy holder’s chosen beneficiaries on death. After choosing a policy the holder makes regular payments towards it that are then payable to the beneficiaries.
There are many different kinds of life assurance policies available today. If you are interested in a starting a policy the following information will help you choose the right one.
- Pension Term Assurance plans offer a payment on the death of the policy holder. Similar to level term assurance plans no interest is paid on any savings.However there is the advantage that holders may be eligible for tax relief on premiums paid. Individuals wishing to join a pension term assurance plan must not be involved within a company pension scheme which may not be beneficial for everyone.
- Level Term Assurance plans are popular as they are one of the least complex life assurance plans available. Policy holders will choose a term which is the amount of time that the policy covers. If the policy holder dies within the term then the beneficiaries will receive their entitlement. Level term assurance is a low cost option as the policy has no savings aspect and only offers payment on death.
- Convertible Term Assurance plans offer the same package as a level term assurance plan but with the added flexibility of being able to change to a different plan whilst the plan is ongoing. Holders are free to change to a different plan regardless of personal health and they are also able to extend the terms of the contract at their own leisure. Too offset this increased freedom these plans will usually cost marginally more so it is recommended to seek advice before securing a policy.
- Whole Life Assurance plans offer increased freedom compared to term assurance plans and are priced reflectively. Whole life assurance plans will pay a sum on the death of the holder regardless of whether payments are still being made. The other attraction is that payment of premiums can be cancelled at the holder’s request and a surrender value credited. The surrender value varies depending on the number of premiums paid and also the particular plan chosen. There are many different plans available with varying rates of interest on offer.
If you require further information please contact your local independent financial adviser.