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Is Life Cover known under different names?
Because Life Assurance is such a varied and flexible product, it can come under a number of different names. Each generally describes the covers aims however some are simply interchangable with Life Assurance:
Life Insurance
A general term used
to mean the same as Life Assurance. The difference is that in the
insurance world they insure against something which might happen
but they assure against some they know definitely will happen at
some stage, i.e., death.
Mortgage Life
Assurance / Mortgage Life Insurance
Mortgage Life Assurance is used to protect your mortgage against the risk of you dying and leaving it behind for your family to continue paying.
Mortgage Life Assurance is only suitable for mortgages which are Capital and Repayment because the level of cover is designed to reduce as your mortgage reduces over the years.
The reduction ensures
that there is always enough in the 'pot' to pay off the mortgage if
the worst happens but there will be very little surplus
remaining.
Decreasing Life Assurance / Decreasing Life Insurance
Decreasing Life Assurance is a term used to mean the same as Mortgage Life Assurance. The 'decreasing' refers to the reduction in cover over the years.
Term Life Assurance / Term Life Insurance
Term Life Assurance
is the opposite of Mortgage Life Assurance in that the amount of
cover remains the same throughout the term of the policy and does
not reduce. This type of Life Assurance is suitable for those
people with Interest Only mortgages, those wishing to cover funeral
expenses and people wanting to leave a sum of money behind to
ensure their families standard of living.
Level Life
Assurance / Level Life Insurance
Level Life
Assurance or Level Term Life Assurance is another term which is
used to refer to Term Life Assurance.
Increasing
Life Assurance / Increasing Life Insurance
Increasing Life Assurance is an extra option offered by most insurance companies which allows you to protect your Term Life Assurance policy from the effects of inflation. Each year you will be offered the opportunity to increase your amount of cover inline with the retail price index without any further need for medical information.
This allows your
policy to retain its real value over the years so your family
receive a payout of equivalent value in years to come.
Index Linked
Life Assurance / Index Linked Life Insurance
Another term used to refer to the increasing life assurance option offered on term life assurance policies.
Critical Illness Cover
Critical illness cover is an important financial safety net. It's designed to to pay out a fixed cash amount if you're diagnosed with one of the critical illnesses covered in the individual insurer's policy.
Critical Illness Cover is designed to pay out in most circumstances including cancer, heart attack and stroke. However because of advances in medicine, not every type of cancer will have a severe impact on your lifestyle if discovered and treated early enough, for example, a cancer needs to have spread or reached a specified severity to be covered.
Income protection
Income protection insurance pays you a regular income if you can't work because of sickness or disability and continues until you return to paid work or you retire.
The amount of income you are allowed to claim will not replace the exact amount of money you were earning before you had to stop work. You can expect to receive about a half to two-thirds of your earnings before tax from your normal job. This is because some money will be taken off for the state benefits you can claim, and also the income you get from the policy is tax free.
Family Income Protection Plan
Family Income Protection plans are designed to pay a monthly amount to your family in the event your death or critical illness. You select a monthly sum assured and a term for the cover.