What are the different types of life insurance?
With a range of different types of life insurance options available, choosing can be confusing, but it doesn’t need to be and we’re here to help. Whether you're looking for protection for you and your family, or you need cover for your business, we can help you get the right insurance plan for you.
Although there are different types of life insurance plans, deciding on which plan is best suited to you does not need to be complicated.
You might decide you want serious illness cover, so you will receive financial support if you are diagnosed with a serious illness that is covered under the policy. You might want to consider term protection, which is life insurance over an agreed term, or whole of life cover, which lasts for an entire lifetime. You could need to protect your mortgage, business or family... or all of these things.
In this article we list the main types of life insurance and life protection products to guide you through your choice.
Term Life Insurance
Term Life Insurance is life insurance over an agreed term. If you die or become ill during this period, the people you’ve named as beneficiaries get the cash pay-out of your policy. For example, you may decide to buy Term Life Insurance to cover for your key working years, when you have dependents who rely on your income.
Find out more about term life insurance.
Convertible Term Life Insurance
Convertible Term Life Insurance is a specific type of Term Life Insurance where the policy holder has the option to convert the policy into a new policy for a longer term.
Find out more about convertible term life insurance.
Whole of Life Insurance
Whole of life insurance is life insurance that lasts for a whole lifetime and is not limited to a specific term. If you pass away, this policy will provide a lump sum payment to your beneficiaries. Whole of life insurance can also provide tax-efficient inheritance planning cover for your family, so as not to impact their inheritance.
Premium costs are determined based on your circumstances and the level of cover you need; your premium is locked in at the time of purchase, so it won’t change while you own your policy. Usually, the earlier you take whole life insurance (the younger and healthier you are at the time of the purchase), the lower the premiums.
Find more about whole of life insurance.
Pension Term Protection
Pension Term Protection is life insurance that covers the period of time up until your retirement. If you die before retirement, the policy will pay out so that your dependents are cared for financially. Tax relief is available at the marginal rate of tax on the premiums you pay, as the plan is structured as a pension product.
Find out more about pension term protection.
Mortgage Protection is a dedicated type of life insurance, which helps secure the ownership of your home by paying off the outstanding mortgage if you die or become seriously ill within the specified term. This cover relieves your family of the financial burden of repaying the mortgage. Mortgage protection is usually compulsory if you are buying your home through a mortgage provider.
Find out more about mortgage protection.
Serious Illness Cover
Serious illness cover (also known as critical illness cover) provides you with financial support if you are diagnosed with a serious illness; it provides a tax-free, cash lump sum to you if you are diagnosed with a specific serious illness and a lump sum payment to your family if you are unable to work. This type of policy can cover more than one person and the level of cover can be increased at times when needed.
Find out more about serious illness cover.
Accelerated Serious Illness Cover
Accelerated serious illness cover is usually available as an optional benefit that can be added to a life insurance policy. For example, if you take out a life insurance policy to the value of €150,000 and add accelerated serious illness cover of €100,000, if you are diagnosed with a serious illness covered by the policy, you could claim €100,000 serious illness benefit. Should you subsequently pass away during the policy term, the remaining €50,000 will be paid to your beneficiaries.
Find out more about accelerated serious illness cover.
Cancer Cover is another optional benefit which can be usually purchased as part of a life insurance policy. It pays out a tax-free, cash lump sum if you are diagnosed with cancer of a specified severity.
Cancer Cover is different from serious illness protection, in that it focuses only on cancer and therefore it’s cheaper than serious illness cover.
Personal Accident Insurance
Personal accident insurance covers you in the event that you suffer a serious injury, as a result of an accident, which prevents you from working. This cover provides you with a regular income to support you and your family financially. Find out more about personal accident insurance.
Accidental Death Cover
Accidental death cover provides for the payment of a lump sum if the policy holder dies as a result of injuries sustained in an accident, for example a car accident.
Permanent Health Insurance
Permanent health insurance provides a regular income if you are unable to work due to ill health or disability for a given amount of time. In order to receive the payment, the illness or disability must last longer than a specified amount of time, called the ‘deferred period’. Find out more about permanent health insurance.
In addition, Zurich Life offers a range of life insurance plans which protect against the loss of certain key members of staff, such as employees, directors, partners, as well as providing bespoke group risk schemes. Find out more about business protection insurance.
Talk to one of our financial advisors
As there are a number of life insurance options available, having all the information is key. Sound advice is invaluable, so it's a good idea to seek guidance from a financial advisor. A financial advisor can guide you through the process and help you select the right plan for your circumstances.
You can find a local financial advisor near you with the Zurich Advisor Finder. Alternatively, our Financial Planning Team can provide you with more information about Zurich's life insurance options.