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Level Term Assurance
Pays out a specified amount if you die within a selected period of years. As with most other options it can be set up as joint life, single life or life of another. It can also include many other benefits such as critical illness cover, income protection and waiver of premium, within the same policy. 
Decreasing Term Assurance
Pays out a decreasing amount if you die within a selected period of years. The amount of cover would decrease in line with the mortgage amount on a repayment mortgage, or by a chosen percentage. This cover is cheaper than level cover. It can also include many other benefits within the same policy.
Family Income Benefit
Pays out a series of regular tax-free lump sums that can be used as an income. The income is paid out when the person insured dies and is paid until the end of the policy term. The income can also be index linked so that it increases yearly to help counteract the effects of inflation. This type of policy can include critical illness cover.
Critical Illness Cover
Pays out a lump sum in the event of diagnosis of a specified illness within a selected period of years, it can either be a level amount or decreasing, and the cover can have life assurance included. The number of illnesses covered can vary greatly between different insurance companies.
Income protection
Pays a regular tax free income if you are unable to work for medical reasons, a deferred period can be selected so that payments are received when needed, for example when an employer stops paying sick pay. The cover can be index linked and would continue until you either returned to work, died or the policy reached the end of its term, (usually age 65).
Accident Sickness and Redundancy cover
Would pay a regular monthly income to help pay your mortgage and other related costs if you unable to work due to accident or sickness or had been made redundant. It would pay the selected benefit for up to 12 or 24 months, stopping when you returned to work. Cover can be selected to suit your needs with different deferred periods and cover for just redundancy or just accident or sickness.
Whole of Life Policies
Would cover you indefinitely, unlike a term assurance that expires after a set term. Therefore, it will pay out the sum assured at some stage. Because the pay out is guaranteed the premiums are more expensive. This type of policy can acquire a surrender value as a pot builds up to pay out the sum assured.
Inter Vivos Policies
Are used for Inheritance Tax Planning. The tax potentially payable on gifts made by a donor to relatives or friends gradually decreases over a seven year period. If the donor survives the full seven years, then the tax is avoided completely. An Inter Vivos policy provides life cover in the event of the donor’s death within that seven years, for the potential tax outstanding at that time.
As with most things, there are variants on the types of cover described above, with many companies offering other benefits that can be included within the policies. It is important to get advice so that any cover suits your needs as well as your budget.
Because of the advances in medical science and car safety, people tend to survive illnesses and accidents better than in the past. As a result many life assurance premiums have reduced and the cover offered with critical illness and income protection is now often better than clients existing policies. However before changing any current policies clients are advised to seek independent advice, to ensure that they are getting the best possible cover for their families and mortgages, at the best price.
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