What do you need to know about Life Insurance?

Life Insurance pays out a tax-free lump sum if you die; there is no investment value.

Life Insurance is a commonly and established way of providing a tax-free capital sum if a policyholder were to die whilst the policy was in force.

It is important to remember that Life Insurance Policies do not have any investment value. If the policy finishes without a claim, there is no payout.

Perhaps the first thing you’ll need to decide how much to insure for. If you are insuring to provide security for the family, then there are a number of aspects to consider. This can be a bit complicated so we have devoted a special FAQ to it – see below.

If you are insuring your mortgage then sum insured should match the sum you owe your mortgage provider.

The other key point to decide is how long you will be covered for. Most Insurance Companies regard 2 years as the minimum, but 20 – 25 years is the most common length of time. Most Insurance Companies will not offer insurance past the age of 70. A few will insure beyond 70, but that becomes very expensive. For that reason the online quotations we provide do not go beyond a 70th birthday.

Think about whether you need cover for Joint or Single lives. This will depend on your circumstances, so see the related question below or more details.

Similarly, you’ll need to choose between a Guaranteed or Reviewable policies. The rule of thumb is that Guaranteed policies have higher premiums to start with, but over the longer period they are the better deal. Again, you can read more in the related question.

Don’t worry about whether you need to include Terminal Illness cover. We automatically include Terminal Insurance cover in your policy at no extra cost. So, if you develop an illness and your doctor confirms that you are expected to die within 12 months of diagnosis, the policy would pay out straight away, rather than delaying payment till after you pass away.

Frequently Asked Questions related to the above topic.
Click below if you wish to read them: -

• Life Insurance - why do you need it?
• You have a Repayment Mortgage. What sort of Life Insurance do you need?
• You have an Interest Only Mortgage. What sort of Life Insurance do you need?
• How much should you insure for?
• How long should you insure for?
• Should you have a “Guaranteed” or a “Reviewable” policy?
• Should you include Critical Illness Insurance on your policy?
• Should you consider Mortgage Life Insurance instead?
• What is the difference between Critical Illness Insurance and Terminal Illness Insurance?
• Which optional extras are important for Life Insurance?
• If your insurer asks for a higher premium because you are Rated, is it worth applying to another insurance company?
• What correspondence can you expect to receive after your Application has been submitted?
• Go to menu of Frequently asked Questions about Life Insurance
• Go to menu of Frequently asked Questions about Mortgage Life Insurance
• Go to menu of Frequently asked Questions about Critical Illness Insurance
• Go to menu of Frequently asked General Questions

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This web site is owned by Andromeda Webs Ltd. Andromeda Webs Ltd, is an Appointed Representative of Web Publishing House Ltd. Web Publishing House Ltd is authorised and regulated by the Financial Services Authority for insurance mediation.