A simples guide

The different types of life insurance

When comparing life insurance there are a couple of things you should ask yourself.


Why get life insurance?

We know it’s not a cheerful thing to think about, but life insurance can give you peace of mind. It can help to reduce the worry of leaving loved ones and dependants without the money to cover debt or bills, should you pass away. Money never replaces a family member, but it can help knowing that it won’t be a worry.



When should I get it?

People typically only really think about life insurance during a big life event, such as buying a home, getting married, having a baby or starting a new job. But it may be worth considering one sooner, when you’re young and healthy, as the premiums could be lower.


What affects my premium?

Certain factors may affect your premium. Your age, your health, how long you want cover for, the level of cover you need and whether you smoke. So be sure to compare to find the right policy for you.

Which policy should I choose?

Deciding which type of life insurance is right for you and your family depends on your needs:

What do my loved ones need?

There are two main types of policy to think about.

1. Level-term insurance gives you cover for a fixed amount of money, for a fixed amount of time. If you pass away within that period, the policy pays out a lump sum. Useful if you want to leave a lump sum for your loved ones so they can continue with their way of life.

2. Decreasing cover insurance designed for people whose financial commitments will reduce over time. For example, if you’re repaying a mortgage. The amount of money needed after your death to cover the mortgage will naturally decrease as you pay it off.


What else should I consider?

Once you’ve decided on the policy you need, there are a few types to consider, depending on your circumstances:

Critical illness cover

Pays a tax-free sum of money to cover the costs of certain serious illnesses eg: to help with things like a mortgage payment if you’re unable to work. All critical illness policies cover cancer, heart attacks and strokes.


Joint life policies

Made for couples who share financial commitments. They can sometimes be cheaper than two separate policies, but it is worth knowing these policies end once one partner passes away. So if you wanted to continue the policy after it’s paid out, you would need to consider buying a new policy.

Over 50s plans

Often known as Guaranteed Whole of Life plans, these tend to cover a smaller payout for things such as funeral expenses or debt. But the amount of the premium will be guaranteed for the life of the policy.

over 50

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