Protection for you loved ones

Life insurance plans are commonly used to provide financial
protection for a surviving partner in the event of premature death.

What type of plan should I use?

This will depend on your personal financial circumstances and
objectives. Term life insurance, family income benefit and whole
life insurance plans are most commonly used.

Below is an example of where life insurance could be used to provide
the protection needed:

John is married and aged 28. He has 2 children aged 4 and 6. His
wife does not work as her time is spent looking after the children.
They have a mortgage in their joint names that is covered by a
separate life insurance policy. John is concerned that if he should die
prematurely the loss of his income would bring financial hardship to
the family.

John recognises that the critical period where the family is at most
risk is the number of years before his youngest child becomes
financially independent. John has decided to take out life insurance
cover on his own life for 17 years as he hopes his youngest child will
go in to higher education. He has decided to use a level term life
insurance plan.

How much should I insure for?

This will depend on your personal financial circumstances and what
you want to achieve. Below is a list of some of the things you would
normally take in to account:

• The level of income your surviving partner would need
• How long would that income be required for?
• The amount of debt not covered by life insurance
• The amount of family savings and investments
• How much can you afford each month from your disposable
income?
• Other life insurance policies you might have

This list is only a guide to some of the issues you should consider.
Professional advice should be taken through an Independent Financial
Adviser to ensure that you choose the right policy to meet your needs.