With a maximum cover policy, your cover is linked to an investment fund. Whole-of-life policies broadly come in two main types - balanced cover and maximum cover: Whole-of-life policiesĪs the name suggests, whole-of-life policies are ongoing policies that pay out when you die, whenever that is.īecause it's guaranteed that you'll die at some point (and therefore that the policy will have to pay out), these policies are more expensive than term assurance policies, which only pay out if you die within a certain timeframe.
If you die after the term of the policy has finished, there will be no monthly payout to your loved ones. Instead of a lump sum, though, it pays out a regular monthly income to your beneficiaries until the policy's expiry date if you die.Īt the outset, figure out what sort of income would be needed your family to be financially stable should you pass away. Family income benefit policiesįamily income benefit insurance is a type of decreasing term policy. But with increasing term insurance, you know that the cover your loved ones are entitled to will increase too. The idea here is to combat inflation - as the cost of goods becomes more expensive, each pound in cover that you have needs to stretch that little bit further.
In other words, the later into the term that you pass away, the bigger the payout your family will receive. With increasing term insurance, the size of the payout increases as the term of your policy continues.
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