Choosing The Right Life Insurance Cover

In Family, Individual, Insurance by Tom McGuinness

Few people like talking about dying. Unfortunately, it’s a subject that needs to be discussed at times. After all, it’s something that’s going to happen to all of us someday… And while we can’t predict the future, we can prepare for it and lessen the burden that will fall on our loved ones when we die.

One of the biggest safety nets you can put in place to help your loved ones in the event of your death is life insurance. Okay, so it’s not going to be the most exciting thing you’ve ever purchased, but it could be one of the most important.

But why do so few people in the UK have life insurance? Indeed, according to the latest State of the Protection Nation report from Royal London, 42% of people with a mortgage have no life cover in place.

Maybe it’s because many simply never think about it, or don’t want to think about it. Then there are those who automatically dismiss it as too expensive.

However, the reality is that even though it’s not compulsory – even if you have a mortgage – if your family relies on you as the main breadwinner to ensure the mortgage obligations are met each month, life insurance can prevent them being left in financial dire straits if the worst happened.

What Is Life Insurance?

While it comes in many different shapes and sizes, life insurance is, in short, a financial safeguard that provides protection for your dependents if you die. In the event of your death, your family will benefit from either a lump sum or regular payments (depending on your life insurance policy), which they can use to pay the mortgage, pay for your funeral and put towards general living costs.

The amount you’ll pay each month for your life insurance depends on a number of factors, including the state of your health, personal circumstances, level of cover and the type of policy you choose.

What Types Of Life Insurance Are There?

There are six main types of life insurance, each designed to meet specific needs should you die:

  1. Term insurance – pays out a fixed level of benefit for a set period of time, e.g. 10, 15, 20 or 30 years.
  2. Increasing term insurance – the level of benefit paid out increases every year over the term.
  3. Decreasing term insurance – the level of benefit paid out decreases every year over the term.
  4. Whole of life insurance – a policy that lasts for the rest of your life and pays out a set sum whenever you die.
  5. Family income benefit – pays a regular income rather than a lump sum until the policy runs out.
  6. Guaranteed 50-plus life plan – guarantees life insurance cover for individuals who are 50 years old and above.

You can find out more about each type listed above on our Life Insurance page.

How Much Cover Do You Need?

That all depends on your circumstances.

If you have a mortgage, taking out term insurance that pays off your mortgage if you die before it’s repaid is often a sound safeguard.

If you’ve got a capital repayment mortgage, a decreasing term life insurance policy may be best.

If you want to factor in rising living costs going forward, an increasing term life insurance policy is what you’ll want.

Basically, the type of life insurance you choose will be determined by what you want it to do when you die.

Want to know more and get a free quote? Call us free on 0800 970 1618 or click here to enquire online.

Tom is the Sales Director for Premier Choice Group. In his role, Tom oversee’s growth across all areas of the business while maintaining a small number of his own clients. At Premier Choice, Tom and the team deliver a unique, personal service to every client, while growing the business and maintaining a strong reputation as the UK’s best intermediary.