Life Insurance

Although no one wants to think about, we’re all going to die at some point. This can not only leave dependents is distress, but also in financial trouble, especially when you take into account the expense of funeral costs. As a result 75% of Brits have taken out a life insurance plan to support their family after they die.

Do I need life insurance?

Life insurance is not a legal requirement and not everyone feels the need to take it out. Indeed, it is an incredibly personal choice. However, if your family depend on you financially, it is probably a wise and considerate idea to take out life insurance as this means that you can still provide for them after your death.

If you don’t have any dependents or a mortgage to repay you don’t really need to think about taking out life insurance unless you don’t want to leave your relatives with a hefty funeral bill or have any anxieties about inheritance tax.

There are a number of different types of life insurance available. The most common types are:

  • Whole-of-life policies, as the name suggests, will pay out for your death whenever it happens. As this policy is guaranteed to pay out, it is more expensive than term life insurance.
  • Term life insurance comes in a range of policies, but it essentially only pays out if you die within a certain period. So if you don’t die in the set period, your family won’t reap the benefits of the policy. Within this type of life insurance there are four main sub-groups of policy:
  • Level term. As the name suggests, this policy means that the amount you pay into the policy and the amount that your beneficiary receives upon your death are the same throughout the term.

  • Decreasing term. This type is geared towards those with mortgages as the later on the individual dies, the less of their mortgage is left to pay.

  • Increasing term. This is the opposite, so the older you die, the more money your beneficiary will receive.

  • Family income benefit. As opposed to receiving a lump sum upon your death, this type of life insurance supplies your beneficiary with a regular income. Again, you can choose whether this policy is increasing decreasing.

Where to buy life insurance

A range of insurance companies offer life insurance. In order to secure the best deal and save yourself some time, it is recommended that you use a price comparison website. These websites request a few basic details and can provide instantaneously with quotes from a range of popular life insurance providers. Once you have chosen your provider you can usually purchase the insurance policy online or over the phone.

Top UK life insurance providers:

  • LV= is a popular choice of insurance provider. They offer a range of policies and specialise in policies for those with a healthy lifestyle, offering rates form £5 a month

  • Legal and General is another popular choice for life insurance. They boast a range of award-winning policies.

  • Standard Life provides decreasing term life insurance and offers M&S voucher incentives.

Tips for choosing life insurance

Be wary of low-start polices. While initially it may look like you are getting a good deal, the premiums increase throughout the term, which can make this type of policy more expensive than a level-term one.

Do not withhold any health information when applying for life insurance as it could invalidate you policy, meaning that your beneficiaries may be deprived of any benefits.

Look out for what life insurance exclusions. A number of policies will not pay out if you die from drug abuse.

If you regularly participate in risky sports or smoke, you may incur a higher monthly premium to accommodate for this added risk.

Provider Minimum age cover can be taken out Maximum age cover can be taken out Maximum term Maximum Payout
LV= 17 79 45 Unlimited
Saga 50 78 40 Unlimited
Legal and General 17 77 40 Unlimited
Post Office 18 85 51 £500,000