What life insurance is for
Life insurance transfers a risk you cannot afford to carry yourself. In exchange for a premium, the insurer undertakes to pay a defined sum to your nominee if you die during the policy term.
It matters most when other people depend on your income — a spouse, children, or parents — and when there are liabilities such as a home loan that would otherwise fall to them.
The main types
- Term insurance — pure protection. A large sum assured for a modest premium, with no maturity value if you survive the term. For most families this is the right starting point, and often the only life cover genuinely needed.
- Endowment and money-back plans — combine cover with a savings element, offering a maturity benefit but a much smaller sum assured for the same premium.
- Unit-linked plans (ULIPs) — cover combined with market-linked investment, with a lock-in period and charges deducted from the fund.
- Whole life — cover extending to a very advanced age, generally used in estate planning rather than income replacement.
How much cover is enough
The honest way to arrive at a number is to work it out rather than pick one:
- The income your family would need each year, for the number of years they would need it.
- Plus outstanding loans, which should be cleared rather than serviced.
- Plus lump sums already committed — education, a wedding.
- Less the assets already in place that could be drawn on.
The figure that emerges is usually a good deal larger than the cover most people hold. We will run this calculation with you before recommending any amount.
Things that matter at claim time
- Disclose fully. Non-disclosure of a medical condition or a habit is the most common reason a claim is contested.
- Keep the nomination current — after a marriage, a birth or a bereavement.
- Tell your family the policy exists, and where the document is kept. A policy nobody knows about pays nobody.
- Cover taken under the Married Women's Property Act is held in trust for the beneficiaries and protected from creditors — worth considering if you have business liabilities.
Please note
Insurance is the subject matter of solicitation. Please read the policy wording, the prospectus and the exclusions carefully before concluding a sale.