Cheap Insurance from MLRC

It won't happen to me. That is what many people (rather hopefully) think. However, accidents, redundancy and long-term sickness are problems faced by millions each year.What you should be thinking is, 'What would happen if ... ?' Could you pay your mortgage if you could not work because of illness or following redundancy? How would you payoff your loans, overdraft and credit card balances if you suffered a dramatic fall in income? If you died, would your family be left financially secure?

These are difficult questions to address. Facing up to the possibility of years of unemployment, months of debilitating illness or death is not easy. However, dealing with the possibility of the events is far easier than dealing with the reality if you have made no financial provision to protect you - and your family - should the worst happen.

Fortunately there are several types of insurance designed to help keep individuals and their families afloat financially.Most of us cannot afford every type of cover, but it is possible to find a policy or combination of policies that will suit your circumstances and your pocket.

LIFE INSURANCE

Anyone who has a family depending on them needs life cover. It is one of the cheapest types of insurance policy you can buy - and one of the most necessary.Even those with no dependants may need cover. For example, if you have debts or business loans that would have to be paid off if you died, you need life cover.

There are several different types of life policy

Death in service benefits

This is free life cover (usually for three or four times your annual salary) given to employees who are members of company pension schemes. However, remember that if you leave your job, the life insurance will cease. It is therefore advisable to have additional separate life cover.

Term assurance

This is the cheapest, most basic and most popular form of life cover. It pays out a tax-free lump sum if you die before the term of the policy is up. Survive for the full term, and you do not get a penny back. Term assurance can be:

• Flat rate: The same amount of cover for the term of the policy.

·Increasing: A rising amount of cover (and premiums) in line with inflation. These policies are for those wanting to protect their family's lifestyle.

·Decreasing: This is usually linked to a repayment mortgage - as the mortgage is repaid and the amount owed reduces, so does the amount of cover.

·Family income benefit: This gives dependants a yearly income rather than a lump sum, with the income paid only for the term of the policy.


Term assurance with critical illness cover

These policies payout if you are diagnosed with a terminal illness before the end of the term and are expected to die within a short period. Alternatively, they payout on death. Again, if you survive for the full term, you do not get any money back.

Whole-of-life insurance

Just as the name implies, this covers you for the whole of your life - not just a limited term. So it will payout - eventually (unlike term insurance, which will not if you survive to the end of the term). As such it is much more expensive. It is ideal for those wanting to provide a financial cushion for their family. There are two types

• Sum-assured policy: Pays a set amount on death.

·Investment policies: The premiums are invested and the investment isyaid to your family. However, in the early years this may be small although some do guarantee to payout a minimum sum.