What is life insurance cover?
Life insurance is designed to pay out a cash sum if you die during the term of the policy. The money can help support the people you leave behind and can be used in whatever way is most needed at that time.
For some people, that may mean helping a partner or children with everyday living costs. For others, it may mean helping to clear a mortgage or reduce financial pressure at an already difficult time.
Life insurance is sometimes also called life cover or life assurance. The most suitable type and level of cover will depend on your circumstances, including whether anyone relies on your income and what you would want the policy to achieve.
Who might life insurance be worth considering for?
Life insurance is not essential for everyone, but it is often worth considering if someone else would be financially affected if you were no longer around.
You may want to think about life insurance if you:
- Have a partner, children or other dependants
- Have a mortgage or other significant financial commitments
- Have a household that relies on your income
- Want to help leave financial security for loved ones
- Would like cover in place to help reduce stress for your family
For many people, life insurance is about making sure the people around them are better protected financially if the worst were to happen.
Life Cover: The plan will have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.
For insurance business we offer products from a range of insurers.
Do I need life insurance if I have a mortgage or family?
If you have a mortgage, children, a partner or anyone who depends on your income, life insurance is usually worth considering.
A policy could help your family continue paying the mortgage, cover household bills, or provide breathing space at a time when they may be under emotional and financial pressure.
The answer is different for everyone. Some people want enough cover to clear the mortgage. Others want a larger amount to support their family for longer. Some may decide they do not need cover at all. The key is understanding what would happen financially if you were no longer here and whether cover could help.
You may also find our page on do I need Life Insurance Cover useful.
What types of life insurance cover are there?
Two of the most common types of life insurance are:
Level term life insurance
This type of policy pays out a fixed amount if you die during the term of the policy. The cover stays at the same level throughout, so it can be useful if you want a set amount of financial protection in place for your family.
Decreasing term life insurance
This type of policy is often used alongside a repayment mortgage. The amount of cover reduces over time, broadly in line with the outstanding mortgage balance, so it can be a cost-effective way to protect mortgage debt.
Depending on your circumstances, you may also want to think about whether a single policy or joint policy is more suitable. We can help you understand the differences and which type of cover may fit best.
How much life insurance cover might you need?
The right amount of cover will depend on what you want the policy to do.
You may want to think about:
- How much is left on your mortgage
- How much your household needs each month
- Whether children or other dependants rely on your income
- Future costs such as childcare or education
- Whether you already have savings or death in service benefits through work
Some people only want enough cover to repay the mortgage. Others want a larger amount to help support their family for a number of years. There is no one size fits all answer, which is why personal advice can be so helpful.
Life insurance vs critical illness cover
Life insurance and critical illness cover are often mentioned together, but they do different jobs.
Life insurance pays out if you die during the policy term.
Critical illness cover is designed to pay out if you are diagnosed with one of the specific serious illnesses covered by the policy and meet the insurer’s definition.
Some people choose life insurance on its own. Others decide to combine it with critical illness cover for broader protection. The right approach will depend on your budget, priorities and what risks you most want to protect against.
You could also link here to your critical illness page if you have one.
Should you think about income protection as well?
Life insurance is only one part of the bigger protection picture.
If your main concern is how you would manage financially if you were unable to work because of illness or injury, income protection may also be worth considering. This type of policy is designed differently and can help replace part of your income if you cannot work for medical reasons.
For many people, the right protection plan is not just about what happens on death, but also about what would happen if illness stopped them earning.
Why speak to Your Mortgage Expert about life insurance cover?
Choosing life insurance can feel overwhelming, especially when you are trying to weigh up different policy types, cover amounts and monthly costs.
At Your Mortgage Expert, we can help you:
- understand the main types of life insurance cover
- work out what the policy is there to protect
- think about how much cover may be appropriate
- compare life insurance with other protection needs
- choose cover that fits your circumstances and budget
- put the right protection in place with more confidence
We help clients across the UK by phone and video, as well as offering in-person appointments where appropriate.