Most people like to know that if their car was stolen, or they lost a valuable item then they could replace it through an insurance policy. How do we therefore place a value on someone's life?

Members of company or occupational pension schemes usually have 2, 3 or even 4 times their basic salary as a lump sum. Even this is probably not enough.

Life cover should be taken to ensure that any financial dependants would not be any worse off if the life assured dies. Even 4 times a person's salary would only cover the next 4 years.

The cover itself also comes in many guises. The simplest and cheapest version is called term assurance. This will pay out a specified amount should death occur during the term of the policy. These plans do not achieve a cash or surrender value, but do offer high levels of cover for relatively low premiums.

Whole of life plans on the other hand, are more expensive but can be set up to pay out a set amount on death whenever that occurs. These plans do achieve a cash or surrender value at some point.

With most of these plans you can now incorporate critical illness cover. This can be purchased on its own, or "bolted on" to the life cover and will pay out a lump sum on diagnosis of specified illnesses. Critical illness cover should not be confused with Terminal illness cover however, which pays out on diagnosis of a terminal illness, i.e. an illness that would normally cause death within 12 months.

The cost of most forms of life assurance has fallen dramatically over the last 3 or 4 years and should be reviewed on a regular basis, particularly if you took a policy out with your mortgage some time ago.

At Bradshaws' we offer professional advice on what should type of plan is appropriate. Please contact us to make a no obligation appointment.