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What's life insurance?
Life insurance is a policy that pays out to your partner, children or other beneficiaries if you die while the cover is in place. That might sound bleak, but have you considered how your family will cope financially when you're gone? Life insurance could help you provide for your loved ones and protects them from financial hardship when they need it the most.
Matt Sanders, life insurance expert at GoCompare -
Looking for life insurance? Think quality and commitment
Life insurance clearly isn't something to be taken lightly - that's why we aim to help you find the right insurers who can offer policies you can rely on. Look for value rather than cheapness - our commission sacrifice scheme helps us offer you quality products at the right price
Amanda Bathory, insurance editor at GoCompare -
Protection insurance claims and pay outs
Raluca Boroianu-Omura, Association of British InsurersThe fact that protection insurance products pays out £13m a day shows how they can help to relieve the financial strain on families following a death, serious illness or injury. Over 97% of all protection claims were paid in 2016
Find out everything you need to know and compare life insurance
Life lessons
- FAQs on life insurance
- Swot up with the guides in our Life insurance library
Buying life insurance can seem a bit daunting so we've made it as simple as we can.
Our partner Assured Futures can give you free and impartial advice while theidol.com makes comparing policies straightforward.[1]
If you'd prefer to speak to an adviser before you start, you can call 0800 808 6907¥ or - if you'd rather save your phone bill - you can request a call back by filling in a simple online form. All we need is your contact details and the time you'd like to chat.
Types of life insurance
You have a choice of life insurance policies:
- Term life insurance - you'll be covered for a certain period of time
- Decreasing term life insurance - your premiums decrease yearly, usually matching up to your mortgage repayments
- Whole of life insurance - a bit more expensive but this will cover you for the rest of your life
- Convertible life insurance - you'll be on a fixed term policy that allows you to switch to a whole of life policy when you reach the end of it
Life assurance or life insurance?
Most people use 'life assurance' to mean 'life insurance' and vice versa. However, they do technically refer to different things.
Strictly speaking, life insurance pays out if something happens to you, whereas life assurance pays out when it does.
So, cover for a fixed term is life insurance, whereas a whole of life policy would be considered life assurance.
Life insurance for over 50s
If you're aged between 50 and 79, you're guaranteed to be accepted for an over 50s life insurance policy - you don't even need to have any medical assessments.
You'll be covered for the rest of your life but you'll stop paying premiums when you reach 85 or 90.
You'll also have to go through a qualifying period which usually lasts one or two years. If you die within this time, your beneficiaries will only receive the amount you've paid in premiums.
How much life insurance cover do I need?
If you're struggling to work out how much cover you should take out, it's a good idea to talk to a financial adviser.
You might also find our life insurance calculator handy - it'll pop up when you're getting a quote.
Or you can work out how much cover to get by following these steps:
- Note down how much outstanding debt you have - this should include your mortgage
Did you know...?
- The average payout on a term life insurance policy in 2016 was over £75,000 with 98.3% of claims being paid[2]
- Work out how much you contribute towards your household income and your family's needs
- You can try to match this amount with your cover but bear in mind that your premiums may get pretty expensive
- Think about how much you can afford to pay out for life insurance
- Consider any other sources of income that your family receives, like another salary
- Balance the amount of cover you need with the amount you can afford
Find out more
We have plenty of guides available - you can find out more about calculating the cover you need, how the life insurance industry works, funeral plans, making a will, whether you should write a policy in trust, if you should consider holding multiple policies, and options for older people, as well as high-risk groups and those with existing medical conditions.
There's also lots to read on lesser-known areas of life insurance, including gift inter vivos, terminal illness cover, waiver of premium, Family Income Benefit and relevant life plans.
