Types of Life Insurance in the UK – Part One

Types of Life Insurance in the UK – Part One

If you are looking for Life Insurance there is a considerable range of life insurance types in the UK.

Therefore The Cheapest Life Insurance has compiled a two-part blog to highlight what the main aspects of different types of life insurance cover may offer you and of course what the different terminology actually means.

Your home

While it’s not an exhaustive list, it should give you a better idea as to what type of life insurance you may require for your own personal circumstances.

Level Term Life Insurance

Level Term Life Insurance is a life insurance cover that provides you with a fixed amount of life insurance over a fixed amount of years.

You can take out Level Term Life Insurance as a single or joint policy and essentially, the insurer pays out a lump sum when one of you dies within the policy term.

The term is fixed – so for example it may be 15 years, or 20 years or indeed any amount of years agreed with your insurer, and as it’s level, it means the amount of payout will not change within the policy term.

Therefore, if you took out level term insurance for 20 years at a rate of £100’000 for example and it was a joint policy, then you or your partner would receive this amount should one of you die within the 20 years.

Your mortgage is probably the single biggest financial commitment you have, what would happen if you weren’t around anymore? How would you make your payments? How would your loved ones cope?

If the worst happened, you’d want to know that those left behind were safe and secure in the family home. At a distressing time, you’d want to make sure they didn’t have to worry about keeping a roof over their head.

Mortgage Protection

For anyone who has a mortgage, mortgage protection insurance is something that you need to have. However, you are not tied to your mortgage provider for this.  In fact, it is often cheaper to shop around for mortgage protection quotes to find the best deal and good cover.

Mortgage protection offers a way to pay off your mortgage in full should you die, so that your loved ones will not have to sell the family home or downsize when you are no longer around to support them.

Having mortgage protection is something that can give you peace of mind of course but more importantly can help you ensure the future of your family is more secure.

Critical Illness Cover

Critical Illness Cover, often called ‘critical illness insurance’ can offer you security when life throws something unpredictable in your path. While you’re healthy and fit it’s very easy to think of serious critical illness as something that only other people experience. However, during what could be a very challenging time, this is when critical illness cover can be a comfort to you and your family.

Critical illness cover essentially means that your insurer is contracted to pay you a lump sum if you contract a critical illness (listed within the policy) during the term of your insurance.  Depending on the policy type it could also offer a regular monthly income.

Critical illnesses could include things like heart problems.

Whole of Life Insurance

Whole of Life Insurance is generally cover that can offer peace of mind to your family when you die. For example, for a fixed monthly amount, it can pay a sum which can be used towards the cost of funeral cover. (Average cost is currently approximately £3200).

Whole of Life Insurance is suitable for mature people who want to ensure their families are protected from additional financial burden when they die.

With things like inheritance tax, Whole of Life Insurance can also offer your loved ones less worry at what will be a very difficult time for them.

For a fixed monthly premium, Whole of Life insurance basically offers a guaranteed cash sum when you die.  The cover is usually higher than over-50s life insurance too, so depending on your state of health it could offer an alternative life insurance option for you.

Well that’s our ‘part-one’ over for now, but do come back to discover the next blog in this series, which will cover Over 50′s Guaranteed Life Insurance and Private Medical Insurance.

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