What exactly is provident life insurance? Is it better than other types of life insurances? Are there any pros and cons to purchasing provident life insurance? These are some of the questions that may be asking in your mind right now. Before you decide to purchase one, make sure that you understand the difference between this type of insurance and other types of life insurances.
A common kind of provident life insurance offered by an individual company is a critical illness insurance plan. A critical illness plan, sometimes also known as an indemnity life policy, pays out a death benefit to named beneficiaries upon the unexpected death of the insured person. Critical illness policies will payout up to a maximum amount based on a percentage of your total lifetime income, up to a prescribed cap. The cost of these policies are based on your age at the time of coverage, your projected life expectancy, and your health at the time of application. They are typically purchased from an accident insurance company.
Another kind of provident life insurance is called a terminal illness cover. This policy provides a fixed amount of money in place, called the lump sum, in case of your death from a certain illness. The lump sum benefit will be determined by your age at the time of application and your projected life expectancy at the time of death. Again, they are typically purchased from an accident insurance company.
One type of provident life insurance that many people purchase is called a self-assurance plan or a SIP. A self-assurance plan or SIP will allow you to build up cash value with tax advantages over traditional life insurances. You will receive a lump sum of cash at the time of death. This cash value is untaxed until distribution. Some people choose this policy for its tax-free growth potential.
A final type of provident life insurance is called a conditional receipt policy. A conditional receipt is very similar to a universal life policy except that the policy applied at the time of death and the proceeds are available depending on whether the premiums are paid. Should the premiums not be paid within a specified period of time, the death benefit will cease and the policy applied but will not terminate until the funds are available. As with all policies, there are charges for this type of policy and also there may be restrictions on the amount of funds available. These policies are rarely renewed, but if the death benefit is substantial, it may make a great investment.
There are many different types of provident life insurance companies in Scotland. Some of the most well-known include Scotlife, Eon and Aviva. In addition to these well-known companies there are also other smaller ones such as Easier Life, Better start, and many others. It is important to understand that the term “provident” can vary among the various life insurance companies, where it is used, and what the coverage is called.
A typical Scottish provident insurance will provide coverage for illness up to the age of 65 for the male, and coverage for females up to the age of 55. Included in the benefits are medical examination fees up to a prescribed limit, funeral expenses up to a prescribed limit, and income support up to a prescribed limit. If an insured individual has a disability which causes financial inability to earn an income then the disability must be made a critical illness before benefits can be claimed. Most policies will pay the cost of treatment in Scotland, up to the limit prescribed by the National Health Service (NHS).
One of the best ways for a person to get the most out of their provident assurance is to ensure that they receive all of the applicable quotations from the top providers on a timely basis. This will allow a person to have a good idea of their premiums and their ability to afford them based on their current and future living costs. With all of the numerous options available it is easy for an individual to get caught up in the hunt for the perfect policy. The easiest way to avoid this is to ask an advisor to make the proposal on your behalf and then follow through with all of the necessary steps to receive the response. Following this procedure will not only allow you to receive all of the applicable quotations on time but will also result in you making the most effective decision regarding your provident life insurance company of choice.