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Explain each of the following: Life assurance ___________________________________________________________ Mortgage protection policy ___________________________________________________________ - Leaving Cert Home Economics - Question 10 - 2016
Question 10
Explain each of the following: Life assurance ___________________________________________________________ Mortgage protection policy ______________________________... show full transcript
Worked Solution & Example Answer:Explain each of the following: Life assurance ___________________________________________________________ Mortgage protection policy ___________________________________________________________ - Leaving Cert Home Economics - Question 10 - 2016
Step 1
Life assurance
Answer
Life assurance is a financial product where the insured individual pays a premium for the duration of their life, ensuring that upon their death, a predetermined sum of money is paid out to their beneficiaries. This type of policy does not have a specified time limit, which means it remains in effect as long as premiums are paid. It serves to provide financial security for the insured's family by covering expenses such as funeral costs and ongoing living expenses.
Step 2
Mortgage protection policy
Answer
A mortgage protection policy is designed for individuals who have taken out a mortgage. This policy acts to protect the insured party in the event of their death before the mortgage is paid off. It ensures that the outstanding mortgage balance is cleared, relieving financial burdens from the deceased's family. Some mortgage protection plans also offer a savings component, which can increase the policy's cost but can be beneficial for the insured's long-term financial planning.