The most straight forward type of life insurance pays out a chosen amount of money if the person insured dies. Cover is often taken out to provide for loved ones or to pay off a mortgage in the event of death.

It all depends on your circumstances. A single person with no dependents or mortgage might not need life insurance. The main earners in a family with children are more likely to need life insurance! It’s not a nice subject to talk about but imagine how your loved ones would cope financially if you weren’t around.

Level term assurance pays a lump sum in the event of death during the term of the policy. There is no investment element within a term assurance contract so at the end of the term there is no maturity value and life cover ends. Any death claim is paid tax-free and premiums are usually monthly, and fixed throughout the term. Because the term and benefit are known from the outset, and there is no investment content, term assurance can be a cost-effective method of protection.

A decreasing term assurance gradually decreases over the term of the policy

These policies can be used as cover for a repayment mortgage, or other loans where the amount of capital outstanding also decreases over time. Because the benefit reduces over time, the premiums are usually lower than for Level Term Assurance.

Instead of a lump sum benefit like with a level term assurance, family income benefit pays a regular monthly tax-free income to your dependents until the end of the term of the policy.

Critical illness cover provides a lump sum benefit in the event of diagnosis of a defined critical illnesses or medical conditions, such as heart attack, stroke and so on. The illnesses covered will be specified in the policy along with any exclusions and limitations – these differ between insurers.

In most cases, you cannot make changes to a policy once it has started. Some insurers let you increase your cover after a specific event. For example, if you moved to a new house with a larger mortgage they might be able to take this into account and increase your cover. If you want to make a change to your policy and you’re not sure if you can please contact us.

If you apply directly with a provider they will not sacrifice any of the commission. Strange as it may seem this is often the most expensive way to buy life insurance.

Yes you can put any life insurance policy in trust at no additional cost. To find out more about this valuable option please head over to our trusts section.

You can still take out life insurance without any restrictions even if you’re not at work. If you were applying for a particularly large amount of cover an insurer might ask the reason behind the level of cover. This applies whether you’re working or not.

If you do not pay your premiums the policy will lapse and you will not be covered. If you accidentally cancel your direct debit or change your bank account your cover won’t be canceled immediately. You will be contacted for your bank details and your policy will remain in place.

Under current tax rules, pay-outs for critical illness, terminal illness and death claims are usually free of personal liability to pay income tax and capital gains tax. However, in some circumstances, your pay-out may be subject to inheritance tax. You can normally help avoid this by putting your plan in trust. Bear in mind that the law relating to tax may change in the future.

Yes it is. Regardless of which insurer you choose your cover is protected by the governments compensation scheme. For full details of the FSCS scheme please see our terms & conditions.