Life insurance is an insurance policy that provides peace of mind. Dependants will be financially provided for in the unfortunate event of the insured's death. There is no guaranteed payout, as there no guarantee that you will die, similarly with car insurance, it is just in case and provides comfort in knowing your loved ones will not suffer financial hardship if you are no longer around.
You fix the term for the policy, for example, 15 years, or you might have a particular date in mind for instance when the children are at an age less likely to be financially dependent upon you.
Sometimes life insurance is obligatory, as many lenders will insist on it to cover the cost of a mortgage on a property in the event of your death.Get Your Free Quote Now >>
A life insurance policy works in a similar way as any other insurance policy, i.e. you take out insurance and pay monthly or annual premiums. There will be a certain amount of form filling, answering questions regarding your age, health, lifestyle choices known as risks, these risks will all factor into the monthly premiums, e.g. the higher the risk, the higher the premium.
If the insured person were to die when the policy is in force, the insurance provider will pay out the agreed fixed sum, usually in a lump sum, to the beneficiaries of the policy.
Once the life insurance policy reaches the end of the fixed term, there is an option to renew it, but it would need restarting as a new policy based on the insured's current age and health and lifestyle factors.Get Your Free Quote Now >>
There are a few reasons to consider life insurance. The number one reason is financial protection for your dependents to lessen the devastating effects when main householder's earnings suddenly cease. Daily struggles include paying the mortgage and household bills, any debts outstanding and long-term saving towards university or retirement. Life insurance offers a practical solution and peace of mind for loved ones to enable them to continue life without financial worries or burdens.Get Your Free Quote Now >>
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* Example - Level term life insurance. £150,000 cover for a 30-year-old non-smoker for 40 years.
Correct as of February 2020.