Photo AI
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 type of insurance policy where the insured person pays a premium throughout their life, with no time limit on the policy. Upon the insured individual's death, their family or designated beneficiaries receive a predetermined sum of money. This form of insurance is designed to provide financial security to the insured's loved ones, ensuring they are supported after the insured's passing.
Step 2
Mortgage protection policy
Answer
A mortgage protection policy, or term assurance, is a special insurance that individuals typically take out when acquiring a mortgage. This policy protects the insured person's obligation by ensuring that the mortgage is paid off in the event of their death before the mortgage debt is cleared. If the insured person dies prior to the mortgage being fully settled, the policy allows for the payoff of the outstanding amount, giving peace of mind to the insured and their family. Some policies may include a savings component, which can increase the premium costs.