Life insurance
A life insurance policy can provide financial protection for your loved ones, helping to support them if the unexpected happens.
Financial protection for your family
Life insurance is designed to provide a financial payout to your beneficiaries if you die during the term of the policy. Depending on the type of cover you choose, the payout can be used to help repay a mortgage or other debts, replace lost household income, and contribute towards ongoing living costs or future expenses.
How does life insurance work?
Life insurance provides financial protection for the people who depend on you. You choose the level of cover you need and how long you want the policy to last, then pay a regular premium to keep the cover in place.
- Choose the right level of cover. You can select an amount of cover based on your financial commitments, such as your mortgage, household expenses, debts and the future needs of your family.
- Single or joint cover. Life insurance can usually be arranged for one person or as a joint policy covering two people. The most suitable option will depend on your circumstances and the type of protection you need.
- Your premium is based on your circumstances. The cost of life insurance can depend on factors including your age, health, lifestyle, occupation, the amount of cover you choose and the length of the policy.
- Add additional protection. Some policies allow you to include Critical Illness Cover for an additional cost, which can provide a payout if you are diagnosed with a specified serious illness covered by the policy.
- Consider placing your policy in trust. In some circumstances, a life insurance policy can be placed in trust. This can help determine who receives the proceeds of the policy and may allow the benefit to be paid without forming part of your estate.
- A payout if a valid claim is made. If you die while your policy is in force and a valid claim is accepted, the policy pays out the agreed benefit. Your beneficiaries can use the money towards expenses such as mortgage repayments, household bills, childcare and other ongoing financial commitments.
The features, exclusions and eligibility requirements of life insurance policies vary between insurers, so it is important to check the terms of the policy before taking out cover.
Start your quote
What can life insurance cover?
Life insurance is designed to provide financial protection for the people you leave behind. The exact features available will depend on the insurer and policy you choose, but cover may include:
- A cash lump sum – if you die during the policy term and a valid claim is accepted, the policy pays out the agreed amount to your beneficiaries.
- Fixed or guaranteed premiums – some policies allow you to fix your monthly or annual premium for the duration of the cover, provided you do not make changes to the policy.
- Terminal illness cover – many life insurance policies include terminal illness cover, which may pay out early if you are diagnosed with a terminal illness that meets the insurer’s definition.
- Critical illness cover – you may be able to add Critical Illness Cover for an additional cost. This can provide a lump sum if you are diagnosed with one of the serious illnesses specified by the policy.
- Single or joint life cover – policies can usually be arranged for one person or jointly for two people, depending on your circumstances and the type of protection you need.
- Additional policy benefits – some insurers provide extra benefits alongside their life insurance policies, such as temporary accidental death cover or additional protection when moving home. These benefits vary between providers.
Things you need to know
Before taking out life insurance, it is important to understand how your policy works and what could affect your cover.
- You must keep up with your premiums. If you stop making the required payments, your policy may be cancelled and you may no longer be covered.
- Life insurance is not a savings product. Most term life insurance policies have no cash-in value, so you will not normally receive any money back if the policy ends without a claim.
- Exclusions may apply. Life insurance policies contain exclusions and conditions that can affect whether a claim is paid. These should be checked carefully before you take out cover.
- Cover only lasts for the agreed term. With term life insurance, protection ends when the policy reaches its expiry date unless you arrange further cover.
- Your level of cover should reflect your needs. If your financial circumstances change – for example, you move home, increase your mortgage or have children – it may be worth reviewing the amount of cover you have.
- Mortgage protection needs to be reviewed carefully. If you are using life insurance to help repay a mortgage, the amount and type of cover should be appropriate for your outstanding borrowing and mortgage arrangements.
Life insurance policies vary between insurers, so the benefits, exclusions, eligibility criteria and terms of cover should always be checked before you apply.
Compare policies to get the best price
Comparing life insurance policies can help you find cover that suits your circumstances, priorities and budget. With different levels of cover, policy terms and optional benefits available, it’s worth reviewing your options rather than choosing on price alone. We can compare policies from a range of leading UK insurers to help you find suitable protection for you and your family.