Life Insurance

What is life insurance?

Life insurance provides financial cover to take care of your family or dependants if you pass away. It could replace the loss of your income, pay off the mortgage or cover the cost of raising children until they leave home (or all of these), giving you peace of mind that, should the worst happen, your spouse and children will have financial stability at the time they need it most.

What type of life insurance are you looking for?

There are several different types of life insurance and the right one for you depends on your own personal circumstances. Buying life cover is a big step and it’s wise to seek independent advice before committing to a policy.

Fixed or ‘term’ life insurance:

This kind of policy runs for a set number of years and pays out if you die within the term.

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Whole of life insurance:

Whole of life cover runs continually, or until you pass away. It is therefore guaranteed to pay out but premiums tend to be more expensive as a result. Whole of life cover is also known as life assurance.

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Decreasing life insurance:

This is a type of term insurance and can be a cost-effective option where the level of cover decreases throughout the term of the policy. A common use for this type of cover is to run alongside a repayment mortgage where the balance decreases over time.

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Increasing life insurance:

Increasing life insurance might be an option if you think you need a greater amount of cover as the term goes on.

Over-50s life insurance:

Over-50s life insurance is guaranteed to pay out, so is a kind of whole of life cover and, as a result, the premiums could be higher. Many insurers offer guaranteed acceptance without the need for a medical.

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Joint life insurance:

If you are in a couple, having joint life insurance can often be cheaper than two single policies. But note that most policies only pay out once, on the first death, so if the surviving partner requires further cover, they will need to take out a new, single policy. Don’t assume that only one of you would need cover if one of you earns the income and the other stays at home with children - if the at-home parent were to die, the working partner might have to give up their job or factor in expensive childcare costs.

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Reviewable premiums:

These are set for a fixed term initially, after which the insurance provider can review them if your circumstances change. The fluctuation might not suit anyone on a budget.

How does life insurance work?

Life insurance provides your beneficiaries with a tax-free lump sum payout if you die within the term of the policy.  The amount of cover you need, is based on a number of factors that could include, the number of dependents and their ages; the amount of your mortgage or liabilities; the amount of income you are looking to replace - or all of these, whilst premiums are calculated taking into account things that detail your age, your health and your lifestyle.

What does life insurance cover?

• Most common causes of death
• Terminal illness

What does life insurance not usually cover?

• Drugs and alcohol abuse
• Self-harm within 12 months of policy start date
• Dangerous activities - such as…
• Critical illness or injury
• Disabilities or chronic illnesses
• Undisclosed health issues

Do you already have life insurance?

It’s a good idea to review your life insurance yearly in case your circumstances have changed; i.e.  health, lifestyle, marriage status, new job or redundancy, increase or decrease in the number of dependents. and your life insurance might not meet your needs anymore.

Do I need life insurance?

Life cover can be one of the most difficult insurances to talk about, as none of us wants to face the possibility we won’t see our children grow up or reach old age. It’s tempting to think ‘it won’t happen to me’, but that could leave the very people you want to protect in difficult circumstances should the worst happen.

Life insurance might not be needed if you don’t have dependents, although it is wise to look into other types of insurance such as critical illness cover and income protection insurance.

What are the benefits of life insurance?

• Financial Security for Loved Ones: Life insurance provides essential financial support to your family, helping them manage expenses and maintain their standard of living after you're gone.
• Coverage of Outstanding Debts and Expenses: It ensures that any debts, including mortgages and loans, are not passed on to your family, easing their financial burden during a challenging time.
• Funding for Children's Education: The policy can secure funds for your children's education, safeguarding their future opportunities even in your absence.
• Peace of Mind: Knowing that your loved ones will be financially taken care of can offer you immense peace of mind, alleviating worries about the unforeseen.
• Covering Funeral Expenses: It can also cover funeral and burial costs, relieving your family from the financial stress of arranging a dignified farewell.

What do I need to get a life insurance quote?

To obtain a life insurance quote, there are several key pieces of information you'll need to provide. This process is designed to ensure that your quote is as accurate and tailored to your specific circumstances as possible. Here's what you'll typically need:

• Personal Details: Basic information like your age, gender, and possibly marital status. This forms the foundation of your risk profile.
• Health Information: Details about your current health, medical history, and any pre-existing conditions. You might be asked about your weight, height, and any medications you're taking.
• Lifestyle Choices: Information on habits such as smoking or alcohol consumption, and whether you engage in high-risk hobbies or sports.
• Occupation: Your job can impact your risk profile, especially if it involves physical labour or hazardous environments.
• Financial Information: Your annual income and other financial details to determine how much coverage you might need.
• Coverage Details: The amount of coverage you’re seeking and the type of life insurance policy you're interested in (term life, whole life, etc.).
• Beneficiary Information: Details about who you want the policy to benefit in the event of your death.
• Family Medical History: Some insurers might ask about the medical history of your immediate family members, as certain health conditions can be hereditary.

Life Insurance FAQs?

FAQ: How much does life insurance cost?

Life insurance starts from as little as £5 per month, although lifestyle choices such as smoking could increase the premium. It’s a good idea to compare life insurance quotes with a number of providers to make sure your policy covers your individual circumstances at a price you can afford.

FAQ: How much life insurance cover will you need?

How much life insurance you need, will depend on your personal circumstances. Here’s a few things that are worth thinking about:

• How much do you want to leave to your dependents?
• How much of your mortgage is still outstanding?
• How much would be required to pay any major loans or debts such as credit cards and funeral expenses?
• How much income you need to replace
• Do you have any other existing life cover or investments that would pay out in the event of your death?

If you are not sure how much cover you need, speak to one of our brokers, they’ll be able to walk you through all the factors you should consider so that you can find the right policy for you.

FAQ: How long do I have to wait before the policy will pay out?

Immediate Coverage: Many life insurance policies start providing coverage as soon as the policy is in force, which means once the first premium is paid. This means that if the insured individual were to pass away after the policy is active, the beneficiaries would receive the death benefit as outlined in the policy.

Suicide Clause: Most life insurance policies also include a suicide clause, typically lasting 12 months from the start of the policy. If the insured dies by suicide within this period, the insurance company may not pay out the death benefit.

Exclusions: Some policies may have specific exclusions, such as for deaths resulting from high-risk activities or pre-existing conditions, depending on the policy terms.

FAQ: Can mortgage payments be covered by life insurance?

This is one of the key reasons many people choose to take out a life insurance policy. In the event of the policyholder's death, a life insurance policy can provide a lump sum payout to their beneficiaries. This payout can ensure that the family home remains with the loved ones without the burden of ongoing mortgage payments.

How do I buy life insurance?

As with many types of insurance, it’s a good idea to compare life insurance quotes to ensure you find the right cover at the right price. ActiveQuote.com is one of the UK’s leading comparison sites, working in partnership with MoneySavingExpert, and getting your quotes with us takes less than two minutes!

Simply fill in our short online form to let us know whether you want level or decreasing cover, whether you need a term or whole of life policy and the amount of cover required. We’ll also need to know your date of birth, postcode and whether or not you’re a smoker.

As with many types of policy, the quotes will allow you to weigh up affordability of premiums with the level of cover provided; the bigger the payout, the bigger the premiums. Optional extras may sound attractive but, if they make the cost too expensive, it might be better to cover the basics for the time being.

Why use a broker to compare life insurance quotes?

Using a broker to compare life insurance quotes offers expertise and access to a wider range of products, ensuring you find a policy tailored to your specific needs and circumstances. Brokers save you time and effort by handling the research and comparison, and can often find a more cost effective option that meets your needs. Additionally, they provide ongoing support and assistance, both during the application process and in the event of a claim.

• Expertise and knowledge
• Tailored recommendation
• Access to a wider range of products
• Time saving
• Cost effective
• Assistance with application and claims
• Ongoing support

Life insurance providers we work with:

• A.I.G
• Aviva
• HSBC Life
• Legal & General
• LV=
• Royal London
• Scottish Widows
• Shepherds Friendly
• VitalityLife
• Zurich

Find the right cover