The needs to replace earned income on death or serious illness are referred to as Protection Needs. Life assurance companies offer different types of policies to consumers, providing different benefits to meet various financial needs.

Life Assurance Cover pays out a lump sum on the death of an individual insured over a specified period of time in return for a regular premium. The lump sum could be used after death by the next of kin in several ways:

• To pay off a mortgage or other loans;
• To provide a replacement income for the earned income of the deceased;
• To pay taxes that may arise on death, such as inheritance tax.

Serious Illness Cover which, in return for a regular premium, pays out a tax-free lump sum if the insured is diagnosed with one or more of the serious illnesses covered by the policy. Also known as “Critical Illness Cover” and more technically as “Specified Illness Cover” as there is a specific list of illnesses and conditions that are covered, such as cancer, strokes, heart attacks, organ failure and loss of hearing, speech or sight, etc.

Sometimes life assurance and serious illness cover may be bundled into the one policy.

Mortgage Protection – Buying a home is a major financial decision and commitment. Your home has a significant role to play in you and your family’s financial well-being. Mortgage Protection provides a lump sum of money to pay off the balance of your mortgage in the event of your death. It is a basic, cost-effective form of life cover designed to ensure that your family and loved ones’ home is fully protected. A bank will insist that you have mortgage protection in place before drawing down your mortgage. It is usually cost-effective to arrange your own Mortgage Protection.

Income Protection – Generally speaking, your income can be classed as one of your biggest assets. If a client were to suffer an accident or long-term illness, it would prevent them from earning an income. Income Protection is designed to provide a client with an alternative income if the client suffers any illness or injury that prevents them from earning an income from employment and helps take care of your financial needs. Premiums are subject to tax relief at the highest rate.