What life insurance do I need?

Death, illness, accident and disability can all have a major financial impact in terms of lost income and expense. Even if you never make a claim, life insurance can give you and your dependants the peace of mind of knowing that, if the worse did happen, the impact would be eased by some financial benefits.

Insurance needs vary from individual to individual and only you can decide on the appropriate balance between the costs and benefits of having life insurance. In reaching a decision you need to:

• assess your needs, ideally within the context of a general financial review
• prioritise your needs
• take into account any cover you already have including any pension scheme ('death-in-service') benefits
• make decisions on what additional cover you want; and
• shop around and take advice.
  There can be substantial differences in cost between different insurers and some products can be complicated.

Life insurance options

There are three broad categories of cover to consider.

1. Life cover provides benefits in the event of death.
2. Income-protection, also known as income-continuance or permanent health insurance, provides an ongoing income should you be unable to work as a result of an illness, injury or disability.
3. Serious illness cover provides a lump-sum payment should you be diagnosed with a serious illness or medical condition covered by the policy. It pays out when a confirmed medical diagnosis is made of an illness covered by your policy.