Life insurance is designed to pay out a tax-free lump sum in the event of the death of the life assured. You pay a premium usually on a monthly or annual basis and the life insurance provider will provide the insurance. Although you pay a monthly premium there is usually no cash in cash out value of the plan and if you stop paying premiums for your life insurance your cover will stop. Critical illness cover can either be sold as a stand-alone policy or as part of a life insurance plan. It is usually cheaper when combined with a life insurance policy. Critical Illness Cover is designed to pay out a tax-free cash lump sum in the event of the insured being diagnosed with a specified critical illness within the policy term. The illnesses that are being diagnosed with a specified critical illness within the policy term. The illness that are covered are confirmed within the policy Terms of Business and can vary between providers.
Income Protection pays a long term benefit which is usually based as a maximum percentage of your current salary if you are unable to work due to illness or injury. It will usually pay out until retirement, death or your return to work, although short-term IP policies are now available at a lower cost. IP doesn’t usually pay out if you're made redundant, but will often provide 'back to work' help if you're off sick.
Key Person Insurance
Mainly found in the business environment, key person insurance is a life insurance based policy, which is usually taken out by a business on somebody who is a key person to that business and the business would be expected to take a financial loss should that person die during the policy term