What are the most common optional extras available on life insurance policies?

When considering the purchase of a life insurance policy you are almost certainly going to be offered optional extras. The following three are the most common: -

Critical Illness Insurance

Critical Illness Insurance provides you with a capital sum if you are diagnosed with a critical illness. Normally the sum insured for critical illness is identical your life cover. However, please note that if the policy pays out for a critical illness –the policy is finished. It will not pay out again if you die.

Critical Illness Insurance can be expensive but for most modern families it is an important part of family protection.

Premium Protection

This is the option whereby, if you were off work through illness or became unemployed, the insurance company would pay your monthly life insurance premiums.

Index Linking

Index Linking means that the value of your insurance cover will increase in line with inflation. It ensures that the purchasing power of your policys’ sum insured remains constant. If you take this option your monthly premiums will rise correspondingly.

Index Linking is only relevant if you are insuring against costs which you expect to increase in line with the cost of living. Index Linking would not be relevant if you were insuring to pay off a mortgage or loans as the value of these do not increase in line with inflation.

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