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There are a number of different types of whole life insurance policies, and consumers can select one that best fits their needs and their budget. As with other insurance policies, you can tailor-make your whole life insurance cover to include additional cover such as critical illness insurance. The variations on whole life insurance cover include:
Non-profit UK whole life insurance policies: This is simplest form of whole life cover, and enables you to enjoy convenience of level payments through term of policy until you die. Upon death, your family received a payout and policy becomes null and void. If you want to pay a little extra, you can take out a policy that is fixed over a specified term, which means that you will only be making payments for a certain amount of time, but your family will still receive a payout when you die.
With-profit UK whole life insurance: This is a cover and investment type scheme, where your monthly payments are split between your cover premiums and investment side of your policy. You will enjoy a guaranteed assured sum, and you may find that your insurer adds discretionary bonuses.
Low cost UK whole life insurance: One of cheapest forms of whole life cover, this type of policy features a decreasing term plan, and policy is combined with a profits fund. As bonuses are added to profit side of policy, policy term decreases. This provides a cost effective solution for those that want to enjoy benefits of whole life insurance cover without having to make high monthly payments.
Unitised UK whole life insurance policy: When you purchase this type of whole life cover, you will also be investing in with-profit units. This means that when insurer makes a payout, sum awarded will be dependant upon value of units in comparison to value of death benefit (the payout will be based upon whichever is highest in value). Each month units are cancelled in order to increase levels of death benefit cover, with reviews carried out from time to time to ensure adequate levels of death benefit cover.
Summary
Both level term insurance policies and whole life policies offer valuable peace of mind to policyholders. The cost of this type of life cover is a small price to pay for peace of mind that comes with being protected, and you can increase this peace of mind by adding extras such as critical illness to your policy for just a small extra fee.
As a nation, we like to insure just about everything we can…our cars, our homes, our belongings, our pets, and even our credit repayments. It therefore makes sense that we should insure most important thing of all – our lives.
Claire Bowes is a successful freelance writer and owner of Life Insurance Quotes where you will find further information on Term Life Insurance and Whole Life Insurance