There are three variations of this type of cover:-

Whole of life

A type of life insurance contract that provides for insurance coverage of the contract holder for his/her entire life. Unlike term life insurance, which covers the contract holder until a specified age limit, a traditional whole life policy never runs out. Upon the inevitable death of the contract holder, the insurance payout is made to the contract’s beneficiaries.

Level term cover

Level term life insurance is one of the most common types of life insurance available. As its name suggests, the amount of cover provided by this kind of policy does not change over time. This means that it won’t increase in line with inflation, or any other measure.

Decreasing term cover

A type of annual renewable term life insurance that provides a death benefit that decreases at a predetermined rate over the life of the policy. Premiums are usually constant throughout the contract, and reductions in policy payout will typically occur monthly or annually.

Critical illness insurance

Critical illness insurance, is an insurance product in which the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the specific illnesses on a predetermined list as part of an insurance policy.

The policy may also be structured to pay out regular income and the payout may also be on the policyholder undergoing a surgical procedure, for example, having a heart bypass operation.

The policy may require the policyholder to survive a minimum number of days (the survival period) from when the illness was first diagnosed. The survival period used varies from company to company, however, 14 days is the most typical survival period used.

The contract terms contain specific rules that define when a diagnosis of a critical illness is considered valid. It may state that the diagnosis need be made by a physician who specialises in that illness or condition, or it may name specific tests, e.g. EKG changes of a myocardial infarction, that confirm the diagnosis.

In some markets, however, the definition of a claim for many of the diseases and conditions have become standardised, thus all insurers would use the same claims definition. The standardisation of the claims definitions may serve many purposes including increased clarity of cover for policyholders and greater comparability of policies from different life offices. For example, in the UK the Association of British Insurers (ABI) has issued a Statement of Best Practise which includes a number of standard definitions for common critical illnesses as below

The schedule of insured illnesses varies between insurance companies. In 1983, four conditions were covered by the policy, i.e. heart attack, cancer, stroke and coronary artery by-pass surgery.

Examples of other conditions that might be covered include:

• Alzheimer’s disease
• blindness
• deafness
• kidney failure
• A major organ transplant
• multiple sclerosis
• HIV/AIDScontracted by blood transfusion or during an operation
• Parkinson’s disease
• paralysis of limb
• terminal illness

Permanent health insurance

Permanent Health Insurance (PHI) is an insurance policy designed to pay you a monthly amount if you are unable to work due to illness, injury or disability. The plan can continue to payout either until you are well enough to return to work or you reach the end of the policy life.

Accident, sickness and unemployment cover

Accident, sickness and unemployment (ASU) insurance provides financial protection if you are unable to work as a result of an accident or ill health, or in the event that you become unemployed through no fault of your own.