What is Life Insurance?

Life insurance is a type of policy that pays out a sum of money to your dependants if you die. Your partner, your children or anyone else who depends on you financially could be a dependant. The cost of life insurance will depend on several factors, such as your age, lifestyle and health.

Life insurance gives you peace of mind that any financial commitments you have – including your mortgage, childcare costs or funeral expenses – are taken care of when you’re not around.

Life Insurance plans are often combined with a Critical lllness plan, click below to find out more…

Critical Illness Cover

Benefits of Life Insurance

Pay off your mortgage

Leave a lump sum for your family to pay off the mortgage and other financial commitments, if you were to pass away.

Replace an income

Helps families cope with the financial pressure of losing the household’s main earner.

Clear outstanding debts

Gives you the peace of mind that any financial commitments you have will be taken care of if you are no longer around.

Meet funeral costs

Relieve financial worries and added stress from loved ones during a time of bereavement.

Pay for day-to-day living expenses

Help your family to maintain their lifestyle, making sure bills are paid.

Provide funding for the children’s education or leave as an inheritance

Ensure that you can provide a future for your children, should the worst happen to you.

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Which type of cover is right for me?

The level of life cover that’s right for you will depend on your personal circumstances…

Term
Other plans

The most common term plans are:

Level
Level-term insurance covers you for a period of time (the term) and the amount is a fixed lump sum of money which is left to your benefactors, if you pass away during the term of the policy.

Decreasing
Decreasing cover is a type of insurance plan that is often (but not always) bought to clear a specified debt such as a mortgage. The value of the sum of money insured decreases over the term of the policy, typically inline with the value of the debt.

Increasing
An ‘index linked option’ allows the policy benefit to increase on an annual basis. This helps to offset the effects of inflation. Most policies can be arranged to increase in line with the retail price index, or in the case of some insurers, by a specific percentage e.g. 8 per cent per annum.

Whole of Life
Whole of life insurance covers a person for their whole life. If your health deteriorates, your premium won’t be affected. However, these policies are often more expensive than others.

Over 50s
An Over-50s plan tends to offer a smaller payout to cover things such as funeral expenses, the amount you pay for your premium is guaranteed so it won’t go up or down.

Joint Cover
Joint life policies are often chosen by couples. You choose an amount of cover, which is paid out in the event that one of you passes away during the length of the policy. The surviving partner will then receive the sum of money. The policy will then end on pay out.

How would your family cope?

No one knows what’s going to happen in the future. But wouldn’t it be nice to know that you’re covered either way?

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Tony S – Warehouse Manager

Tony is 42 years old and gave up smoking 6 months ago and moved over to vaping. He was looking for life insurance to repay his mortgage should he pass away. Tony had experienced problems arranging life cover before, as had recently been diagnosed with the lung condition COPD and was vaping. After much research and speaking to underwriters at several providers, we were able to arrange an affordable decreasing term life policy that meant that Tony’s mortgage was covered should the worst happen to him.

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Suzanne R – Copywriter

Suzanne was looking for life insurance to ensure her family’s financial security, by leaving them a lump sum should she pass away. Suzanne was married and had two teenage children. She had a family history of Motor Neurone disease, although she did not suffer from it herself. She contacted us to find cover, as she had tried previously with other brokers and been unsuccessful. We were able to find a provider who had changed their stance on underwriting ‘family history’ conditions and we were able to offer Suzanne the cover she needed with standard terms.

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Celine G – Team Leader

Celine had recently purchased a new house with her husband and contacted us looking for life insurance to cover the balance of the mortgage. During our conversations with her we also discussed the need for Critical Illness cover. As part of the application, we conducted a health and lifestyle questionnaire with Celine, where she disclosed she had recently suffered a suspected transient ischemic attack (similar symptoms to a stroke). After much research and discussion with several providers we were able to offer the full cover she had requested, including the critical illness cover.

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What factors affect the cost of life insurance?

The cost will vary depending on factors such as your age, health, occupation, whether you smoke, length of the term and whether you choose add-ons such as critical illness cover. Our advisers are on hand to discuss your options to ensure you find a policy that will exactly suit your needs.

1

Your health

2

Your age

3

Whether you smoke or not

4

The amount of cover you want

5

The duration of the policy

Frequently asked questions

What are my options?

Amount of cover
The amount of cover that will be suitable for you will depend on your personal circumstances. Typically, the amount of cover that is right for you will be based on covering a specific financial commitment, such as a mortgage balance, or an amount of money you wish to leave to your benefactors/dependents to support them with day-day living costs.
You may wish to take out a small plan to cover funeral expenses.

Level
A level term policy means that the benefit amount will be a set or fixed amount and the premiums can be arranged on a guaranteed basis, this means the premiums will not increase throughout the term of the policy.

Decreasing
Decreasing term is designed to pay off a repayment mortgage. At the start of your policy, it will pay the full sum assured and over the term, the sum assured will slowly reduce to zero. It is typically 30% cheaper than level term assurance but the price is fixed throughout the term of the policy.

Increasing
An ‘index linked option’ allows the policy benefit to increase on an annual basis. This helps to offset the effects of inflation. Most policies can be arranged to increase in line with the retail price index, or in the case of some insurers, by a specific percentage e.g. 8 per cent per annum.

How long do I need the cover for?

The ideal length of the policy can vary depending on your personal circumstances and also the reasons for why you have taken out the cover. If you are looking to cover against a specific liability such as a mortgage, then you may wish for the term of the cover to match the remaining term of your mortgage, so that the balance of the mortgage is always covered.

Alternatively if you are looking to support your children while they are still young, then you may wish the term of the policy to run until they are at a non-dependable age.

Or you may want the term of the policy to run until you reach a certain age, such as your planned retirement, when you have planned that your financial commitments will reduce.

How does it work?

You pass away during the term of the policy
Your family makes a claim directly with the insurer – they will need to provide a death certificate
The insurer pays-out the sum equal to the sum assured at the time of your death to the other policyholder if it was a joint plan or into a trust.
Your beneficiaries are then able to use the lump sum however they choose to.

What affects the cost of life insurance?

The cost of the monthly premiums is determined by several factors, including how long the cover lasts, your age at the time the policy starts, your health, your lifestyle and your family medical history.

Hobbies that may be considered to be dangerous, such as mountain climbing, diving or flying can affect premiums as well as hazardous jobs and activities that you may be required to do as part of your employment.

During the application process you will need to complete a medical and lifestyle questionnaire where you will be asked about your health and circumstances, after which the insurer will then confirm the cost of your monthly premiums.

Should I set up a trust?

There are many reasons to consider putting your life insurance into a trust, including protecting your beneficiaries from inheritance tax or helping to avoid probate.

A trust is a simple legal arrangement that allows you to gift your life insurance policy to someone else (the beneficiary). It is a good way to ensure that your life insurance is not considered to be a part of your estate when you die, so your beneficiaries won’t face the worry of inheritance tax on your life policy.

If you have a joint life policy then both of you must agree to place your policy in trust.

Putting your life insurance plan into trust, means that you give your policy to the trustees who then legally own your policy and look after it for the benefit of your beneficiaries. You are still responsible for paying the insurance premiums, but the trustees will be responsible for keeping the trust deed and any other documents safe. They make the claim on your policy and ensure that the money goes to your beneficiaries as you intended.

Life Insurance