A Guide To Life Insurance - Pure Protection Policies Packages ....


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Pure Protection Policies Packages...

Even if the total cost of such a "package" marginally exceeds the cost of the elements if purchased separately, such a policy may be the best way to acquire the benefits you want, though obviously you should assess this carefully.

However, the other element often included in such packages is a long-term savings policy, either a with profit endowment or whole-life policy whether in conventional or unit-linked form.

If the package is presented as a whole it can sound very appealing in sales literature. But if it is protection you need, then you should carefully consider the extent of the protection actually provided.

It may turn out that the bulk of the premiums are going towards the long-term savings plan and only a modest proportion used to provide protective cover at a level which is not really sufficient.

Many people make the mistake of thinking that because they are paying, say, £2110 a month for such a package they have all the cover they need, whereas in fact the amount of life cover provided is quite small because the long-term saving plan provides very low sums assured in relation to premiums. (see www.fsa.gov.uk/pubs/other/psd_ppc_05_11.pdf)

If, say, £28 of the £2110-a-month premium was devoted to a 30-year saving plan it might provide only £23,000 guaranteed death benefit.

The remaining £22 would purchase only a modest combination of FIB and term assurance. It is always best to consider your need for protective life cover and for longer-term saving separately, because they are quite distinct and separate needs.

2015 - Guide To Life Insurance - For more information on ....

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The need for protection comes with dependants, and for most people exists from the time of marriage through to the time when children become independent, continuing thereafter in the case of a dependent wife (or husband) at a reduced level.
Prior to marriage and in the early family years, saving needs are usually short-term, for example towards buying a house or building up a business. Life insurance may be useful but other methods of saving are often more appropriate. It is from middle........ see: click here for Permanent Health Insurance


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