Life Assurance Advice

The main differences between whole-of-life assurance and term life assurance are:

• Coverage duration:
• • Whole-of-life assurance: Provides coverage for your entire lifetime.
  • Term life assurance: Offers coverage for a specified term, such as 10, 20, or 30 years.
• Premiums:
  • Whole-of-life assurance: Typically has higher premiums due to the guaranteed payout.
  • Term life assurance: Usually has lower premiums since it only covers a set period.
• Payout:
  • Whole-of-life assurance: Guarantees a payout upon death, regardless of when it occurs as long as premiums have been maintained.
  • Term life assurance: Only pays out if death occurs within the specified term.
• Investment component:
  • Whole-of-life assurance: Can include a savings or investment component, allowing the policy to build a cash value over time.
  • Term life assurance: Purely insurance, with no savings or investment component.

To find the best life assurance policy for your needs, consider the following steps:

• Assess your needs: Determine the amount of coverage you need, the length of time you need it, and any specific requirements (e.g. covering a mortgage, providing for dependents).
• Compare policies: Consult with multiple insurers to compare premiums, coverage options, and policy features.
• Read the fine print: Understand the terms, conditions, and exclusions of each policy.
• Check the insurer’s reputation: Look for insurers with strong financial ratings and good customer reviews.
• Consult a financial adviser: Seek advice from a qualified financial adviser who can help tailor a policy to your specific needs and circumstances.

When choosing a financial adviser, consider the following factors:

• Qualifications: Ensure the adviser is properly qualified and registered with relevant professional bodies.
• Experience: Look for an adviser with experience in life assurance and a track record of helping clients with similar needs.
• Reputation: Check reviews, testimonials, and references to gauge the adviser’s reputation.
• Fee structure: Understand how the adviser is compensated (e.g., fee-based, commission-based) and ensure there are no hidden costs.
• Personal rapport: Choose an adviser with whom you feel comfortable discussing your financial situation and goals.
• Transparency: Ensure the adviser provides clear, unbiased information and explains the pros and cons of different policies.

Yes, there can be tax benefits associated with life assurance policies, such as:

• Policy proceeds: In many cases, the payout from a life assurance policy is not subject to income tax.
• Inheritance tax: If the policy is written in trust, the payout may be excluded from your estate for inheritance tax purposes, potentially reducing the tax burden on your beneficiaries.
• Tax-deferred growth: Whole-of-life policies with an investment component may allow the cash value to grow on a tax-deferred basis.
• Premiums: In some cases, premiums paid for life assurance policies may qualify for tax relief.

Critical illness cover can be added to a life assurance policy as an additional benefit or set up as a stand alone policy, providing the following features:

• Coverage: Pays out a lump sum if you are diagnosed with a specified critical illness (e.g., cancer, heart attack, stroke). Each provider may have different illnesses that they will pay out for.
• Combined or standalone: Can be purchased as a standalone policy or combined with a life assurance policy.
• Payout: If a critical illness claim is made, the policy pays out the specified amount, which can be used for medical expenses, lost income, or other needs.
• Impact on life assurance: Depending on the policy, a critical illness payout may reduce the life assurance benefit, or the policy may terminate after the critical illness benefit is paid.