Most common type of life insurance sold, for loan protection purposes
Sum assured decreases constantly in line with the balance of the loan it is taken out against.
In the case of a claim following death of the life assured, the policy would only pay the bank the balance they are owed on the loan.
Level Term
Similar to reducing term policy, a claim payment is only made in the event of death of the life assured.
Unlike Reducing Term, the sum assured remains constant throughout the duration of the policy.
In the event of a claim following death therefore, the bank or lending facility is paid its dues, and the balance of the sum assured is paid to the legal heirs or the beneficiary mentioned in the policy or proposal form.
In both types of term policy above, no payment is made by the insurance company if the life assured survives the duration of the policy.
Endowment ‘with profits’
Generally has a smaller amount of life insurance, a lower sum assured
Building up profits on your premium.
Positive results typically obtained five years or more after commencing cover, with profits increasing thereafter.
A detailed quotation for this type of policy will generally show the estimated interest rate throughout the duration of the policy, normally giving three levels of interest rate, from pessimistic through to optimistic.
Cancelling, or ‘surrendering’ the policy before the maturity date (the expiry date) normally results in the total profits being reduced substantially.
It is therefore advisable to let the policy run to maturity in order to obtain the maximum benefit.
Investment Bonds
Generally in the form of a single-premium interest-sensitive endowment policy.
Most providers of this type of cover guarantee a minimum interest rate on the premium invested.
The actual investment income is at times higher than the minimum guaranteed rate.
Annual bonuses are generally declared by the company and are normally added to the account for the duration of the policy.
These bonds normally also contain life cover for 100% or 101% of the account balance at the time of death.
Retirement Plans (secure savings plans)
These are plans where monthly payments are made to the insurance company, with bonus or interest rates being applied to the account balance.
There is a minimum amount which can be paid and the product also allows for one-off top-ups to be paid in as well.
There is normally a minimum guaranteed bonus rate applied.
Think of this product as a ‘minimum monthly payment savings account’.
Health Insurance
State hospital to date provides us with medical care paid for by the Government.
This system is over-subscribed and receiving the required care often takes time. It is not uncommon to have to wait for up to six months for treatment for non-critical conditions in view of this over-subscription, or limited facilities.
Private clinics and hospitals have been around for some time now and are available to anyone willing to pay for their service.
It is a known fact that medical care is not cheap, and obtaining cure for a condition can become a very costly exercise.
Health insurance will provide cover for a wide range of services, with pre-set limits or full benefit, depending on the plan selected.
Cover can cost as little as a cup of coffee a day for a young healthy individual.
