Choosing the right cover means thinking about what you need to protect the people you love. This can include any money you owe, like a mortgage and the cost of living now and in the future.
To help you, we’ve explained some of the main options you can choose on your policy and how it will affect your pay out if you need it.
level or decreasing cover
Level or decreasing cover explained
Level cover Life Insurance
Level cover pays out a lump sum should you die during the term of the policy. You can leave this money to your family and dependants, or pay off a mortgage
It provides certainty as both the cover amount and your premiums are fixed for the term.
You can choose both the amount of cover in £'s and the term - from 5 to 45 years
Decreasing cover Life Insurance
The amount of money you’re covered for reduces year on year, making this a good option to cover the reducing amount you may owe on a capital and interest repayment mortgage or other loans.
It provides you with a lump sum of money that decreases usually in-line with your debt.
Your premium remains the same for the duration of your policy
Is usually cheaper than level cover
You can choose both the starting amount of cover in £'s and the term - from 5 to 45 years
Reasons for not choosing Level or Decreasing term
Level cover life insurance:
Level cover is usually more expensive than decreasing cover
It doesn’t keep up with inflation and will be worth less in the future
Decreasing cover life insurance:
If you have an interest only mortgage or you are planning to make under or overpayments this product may not be suitable for you
Depending on interest rates and when you die, the amount of money paid may be more or less than the amount you owe on your mortgage or loan
length of cover
How long do you need your cover to last?
Our life insurance can run between 5 to 45 years, or 5-40 years if you include Critical Illness. Age limits apply
If the money is going to be used to help pay the costs of raising your children, you might want it to end once your youngest is old enough to support themselves
If the money is to be used to repay a mortgage, you may want it to end when the mortgage is repaid
What is your affordability - how much do you want to pay and how can you tailor your cover to fit your budget
Amount of cover
For many people, how much they can afford is also important.
To help you decide how much you need, think carefully about the financial needs of your family or dependants.
Protecting your home
Often your property is one of the biggest investments you will make in your lifetime, so it would make sense to protect your home, should anything happen to you. You can then be comforted knowing that your family won’t have this financial burden when they are facing a difficult time and they can remain in your home for their future.
Protecting your partner
If anything should happen to you then your partner will need to still take care of the household expenses and bills. Think about your regular household expenses and savings to understand how long your partner could last without your income and how much money the family would need.
Protecting your children
The cost of childcare is one of the biggest expenses for the family; especially if your children are thinking of attending college or university in the future, so think about how you can protect those opportunities for your children.
Single or Joint cover
Single and joint life cover explained
Single life cover
Insures only you and pays out if there is a claim during the plan term
You can take single life plans as a couple. If you both take out a plan, if one person dies their plan would pay out, and the other person’s plan would continue, and they would still be covered
This is unlike a joint plan, which only pays out once when the first person dies. The plan then ends, and the second person is no longer covered
Joint life cover
Covers both people insured for the same amount of cover and length of time
The plan pays out for the first claim only
After that, the plan stops and the surviving person is no longer covered
Taking out a joint life insurance plan normally costs less than two single plans
Usually taken out where the death of either person will have a significant impact on the lifestyle of the other, particularly where there are children involved