3 Different Kinds of Insurance Policies

Having some form of insurance to protect against loss of earnings due to ill health, injury or a death in the family can make those trying times that little bit easier.

Financial worries can cause a lot of stress and when families are already dealing with the fallout of a change in circumstances or even the loss of a loved one can be traumatic enough to be the straw that breaks the camel’s back.

There are various types of insurance policy that deal with loss of earnings. Knowing which one or which combination is best for you can be difficult. Let’s eradicate any potential confusion:

 

Life Insurance

 

A life insurance policy from lifeinsurance.org.uk is designed to pay out a lump sum in the event of the premature death of the insured party before the expiration of the policy and is often referred to as term insurance.

The amount you pay in premiums will depend on a number of factors such as the amount of the agreed payout, your own medical history, the type of job you perform and more.

 

Long-Term Disability/Income Protection Insurance

 

This type of policy pays out a monthly sum based on your previous earnings should you need an extended period of time off work due to illness or injury. Any policy you take out will have a set lifespan, usually to last until you reach official retirement age.

If at any point you are unable to work due to sickness or physical or mental incapacity you will continue to draw a monthly amount equal to your average earnings for the past twelve months, until such time as you are able to return to work.

 

Private Health Insurance

 

This type of policy exists to cover the cost of private medical bills. Although the NHS make it less vital to take out health insurance in the UK than it is elsewhere, it can still be a valuable asset.

Should you find yourself needing an operation or awaiting treatment for a serious illness, the NHS waiting times are often far too long.

Photo: BrendaCalara

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Author: Average Joe

A 16 year veteran of the financial planning and financial media circus. Lover of hamburgers and ice cream.

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