What is life insurance?
Life insurance (also known as life assurance, life cover or death cover) is essentially a policy that pays out a lump sum of money to your dependants in the event of your death.
The policy will usually pay out no matter what the cause of death, as long as accurate and honest personal details are provided when the insurance is taken out. The amount of money paid out depends on the level of cover you decide to buy.
Because life insurance only pays out on death it is still advisable to consider additional polices such as critical illness cover – which can sometimes be built into life cover.
Life insurance cannot bring back a loved one, but it can provide reassurance that your dependants will be looked after if you’re no longer around to provide for them.
Do I need life insurance?
Life insurance offers a relatively cheap and straightforward way of ensuring that the financial needs of your family or any other dependants are met in the event of your death. It is usually essential for the parents of school-age children to have life cover and this requirement becomes even more urgent in the case of single parents. Couples without dependants will usually still wish to protect their partner and some people simply want an inexpensive policy which will ensure that their funeral costs can be met.
What are the different types of life insurance?
- Level term insurance policies pay out to your dependants if you die within a fixed term which is chosen by you – 25 years, for example. The premiums stay the same, as does the pay-out whether you die on the first day or the last day of the policy.
- Decreasing term insurance policies are usually aimed at covering the remaining debt on a repayment mortgage if you die within a set number of years. The pay-out decreases over the policy term, usually in line with the remaining mortgage debt.
Within these policies, couples must also decide whether they wish to take out joint cover or two single life policies. Joint cover is cheaper, but only pays out once when the first partner dies. Two single policies should provide a greater level of protection to other dependants.
Better Protect offers more information on the following tailored life insurance policies:
If you are interested in life insurance why not give Better Protect a call on 0203 540 1667 or request a quote using our online form? We offer friendly, expert assistance over the phone and a member of our fully-trained team will call you back to discuss your needs in more detail. We will find the most suitable policy for you and get you the best possible discounted deal.
^ This is based on a 30 year old non-smoker looking for £100,000 cover over 20 years. The premium is £6 per month which equates to £1.38 per week (£6×12)/52).