A life insurance policy is a contract with an insurance company. In exchange for you making payments, typically monthly payments (or in some cases a lump sum payment) the insurance company agrees to provide a lump sum payment, known as a death benefit, to your loved ones (or whomever else you may choose) at the end of the agreed period.
Some term policies pay out a lump sum of money not only if you pass away during the term but also if you are diagnosed with a terminal illness where you are not expected to live longer than 12 months.
Please see below what kind of main life insurance products we provide.
We help you find and compare life insurance quotes from leading insurers and protect you and your loved ones during life's ups and downs.
Level Term Life Insurance
A level term life insurance policy is an insurance product that pays out a lump sum if you pass away. The sum paid out is the same whether you are at the beginning of your policy, or nearer to the end of the agreed period of your policy.
The agreed period of your level term life insurance policy is called 'a term'. Life cover can be purchased with or without critical illness cover.
Life cover can also include terminal illness benefit as part of a standard policy.
As long as the payments are up to date, the beneficiaries will receive a guaranteed lump sum agreed in the policy.
If you do not pass away within the policy term, then usually there will be no pay-out. When this happens, you may wish to take out a new policy if you want to have further security of extending your life insurance term.
Decreasing Term Life Insurance
A decreasing term life insurance policy is an insurance product that pays out less and less over a period of time depending on when the policy is required to pay out.
Therefore, for example, the policy may pay out £100,000 assured sum in the first year but by year 24 it only pays out £5,000.
The idea behind these type of policies is that for example, where you are taking out a life policy to pay your mortgage off in the event of your untimely death, for example, on a repayment mortgage, the sum owed to repay the lender will decrease year on year.
Therefore the amount paid out on the decreasing term policy should approximately match the amount that remains outstanding on your mortgage.
Increasing Term Insurance
An increasing term life insurance policy is an insurance product that pays out more and more over a period of time depending on when the policy is required to pay out.
For example, the policy may pay out £100,000 and an assured sum in the first year but in the 24th year, it may pay £120,000.
The thinking behind these types of policies is that for example, the policy will cover increases in inflation so that what £100,000 would buy today would require £120,000 to buy exactly the same again, say 24 years later, taking into account inflationary effects on that money.
Family Income Benefit
Family Income Benefit works in a very similar way to life insurance.
As with a life insurance policy, you take out cover for an agreed sum and pay the premiums. If you pass away during the term of the policy, your family receives a payout from the insurer.
The major difference between life insurance and Family Income Benefit is how you receive the payout.
With life insurance, your loved ones will receive a single lump sum but with Family Income Benefit the payout is paid like an income for the remainder of the policy term.
So, for example, if you passed away in year 10 of a 20-year policy, your loved ones would receive agreed regular payments, (like an "income"), on a regular basis for the next 10 years, allowing them to keep up with the family outgoings and mortgage payments, etc. and not have to worry about how those bills would be paid.
Some policies cater for short term payouts and some for much longer – obviously, this will impact the premiums payable.