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Life Assurance

There are three main ways you can protect your dependents in the event of death. Two provide you with a lump sum sufficient to repay your mortgage in full and one provides a monthly/annual income which will enable you to replace the lost income in the event of death.

Level Term Assurance

The amount of cover you have chosen will be paid out at a lump sum during the term of the plan if you die during this time. The premiums remain fixed throughout the term and the cover remains at the same level during this time. This type of policy would be recommended alongside an interest only mortgage but could be equally used to protect your family or a business.

Decreasing Term Assurance (Mortgage Protection)

The amount of cover needed decreases during the term of the plan. Typically this type of cover is used to repay a repayment mortgage. As the loan amount reduces the cover mirrors this loan amount. During the term plan, in the event of death, a lump sum is paid out which will enable you to repay your mortgage debt. This type of cover is typically cheaper than Level Term Assurance.

Family Income Benefit

The cover amount is paid either monthly/annually should death occur during the term of the plan. Typically the cover amount is set around the income that would be lost should this even occur. You can choose how you spend the money but it is recommended that you use if to protect your family. I.e. pay for your regular monthly household expenditure, childcare costs etc.