Planning for events such as long-term illness, injury or death is never a pleasant exercise but it is important. If you have not made plans, you risk losing the things you have worked for and built up over the years. Fortunately, it is quite simple to arrange the cover you need to give you and your family peace of mind. The following information will look at the main types of protection and why you need them.
As well as making sure your loved ones are protected against the unexpected, in the event of your premature death, you will want to ensure that the wealth you have accumulated during your lifetime will be passed to those you wish to benefit. Again there are simple ways to help make this happen and we will tell you more about them in this Guide. Obviously, the plans you need to make will depend on your own personal circumstances.

Premature death can result in a loss of income and problems paying debts or meeting tax liabilities. To help with these costs there are three types of life policy - term assurance, whole life assurance and endowment assurance. All these provide you with protection by paying a lump sum on death.

Term assurance (or "temporary assurance") gives you financial protection if you die within a specified period known as "the term". This period might be 5, 10, 15 or 20 years although you can arrange policies to cover you for periods as short as one month. If you are alive at the end of the term no payment is made and there is no surrender value - meaning that if you stop paying the premiums the cover ceases and there is no refund of premiums paid. People on a limited income may find that term assurance is most appropriate. The term (period of cover) can be chosen to cover the length of your mortgage, or cover the period when children are growing up and expenses are at their highest. Some families find a regular income more useful. than a lump sum. For them a ‘Family Income Benefit’ policy could be more appropriate and cost effective.