Collectively Life, Critical Illness and Income Protection Insurance protects families from financial hardship by paying out a sum of money every month in the event that the policyholder is unable to work due to sickness or injury as well as providing a one-off lump-sum if the policyholder dies during the term of the policy, or is diagnosed with a serious illness, or suffers a disability due to injury.
The money can be used to settle monthly household bills, or with a lump-sum payment, pay off an outstanding mortgage, or other debts.
Premiums are paid monthly and the cover is set for a fixed period of time, often for the length of a mortgage or up to the age of retirement. The amount of life insurance cover varies according to how much you can afford and how much cover you think you need to pay off debts and provide day to day income.
For Income Protection Insurance, the cover is set to pay-out for a period of time, either short term (1-5 years) or up to the age of retirement. The amount that the income protection policy will pay out every month is typically limited to 65% of your monthly salary or income.
The cost of the insurance is affected by various factors including the sum to be insured, existing health conditions, lifestyle issues like smoking and high BMI, age, occupation and any regular dangerous pursuits.