Level term insurance and whole of life policies
A popular type of policy is level term life insurance (sometimes called ‘family life insurance’ or ‘family protection’). Level term cover will provide a fixed lump sum to your beneficiaries if you die whilst the policy is active. You can choose the amount of cover and the length of your policy so it could 5, 10 or 25 years. If your policy comes to an end and you’re still around, then you won’t get a payout; but you can of course opt to take out another level term policy.
Because the money that’s provided is one fixed amount, it can be spent however your beneficiaries see fit – whether that’s to pay off a chunk or all of the mortgage or to provide an income for the day to day necessities.
You can also get ‘whole of life’ policies, which cover you regardless of when you pass away (so long as you keep up to date with your premiums). As you can imagine, whole of life policies tend to be more expensive because the term is for as long as you live. We don’t offer whole of life policies at comparethemarket.com