There are 2 main types of life insurance:

• Investment type
• Term Assurance

Investment type insurance pays out if you die during the period of cover and also pays out a lump sum if you haven’t died by the end of the period of cover. In this respect it can be a useful savings tool that can benefit both you and your family long term. However, these policies can be expensive and should be considered alongside other savings products.

There are a raft of products that come under the general heading of Investment Type Life assurance including Endowment policies, Unit Linked bonds.

For further specific information on the possible products within the Investment Type Life insurance market visit the Financial Services Authority web site: www.fsa.gov.uk.

Term Assurance life insurance. The primary aim of this type of insurance cover is to protect your family if you die. Term insurance only pays out if you die during the period of cover of the policy you take out. You may set the term at 10 or 15 years to coincide with the point at which you hope your children would be financially independent or you may decide to take a longer term policy to protect your partner, 15 or 20 years.

Some policies can also have a mortgage protection elements to them or can be stand alone policies.

Term assurance life cover is generally a low cost option but clearly does not meet any long term savings needs if you survive the ‘term’ of the policy.

For more information you may wish to take independent financial advice. The Association of Independent Financial Advisers will help identify a local adviser who you may wish to consult. These advisers are bound by the FSA (Financial Services Authority) and their role is to give you impartial advice about products from many different financial services companies. These advisers should also make it clear what fees/commissions are payable to them from any product you are considering selecting before you commit to purchase this product.

www.aifa.net

The information given in this section is not in any way intended to guide you towards any particular product or service. We do not offer information as financial experts or consultants and we would recommend you taking independent financial advice before purchasing any financial services product.

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