What is life insurance?

  • Protect your family and home
  • Term and lifelong options available
  • Sum assured up to £1,000,000
  • Protection to suit every need
  • Cover from 20p-a-day
Life insurance summary 2022

Life insurance is a type of policy which provides your loved ones with a cash pay out if you were no longer around.

There are various types available to meet differing needs and the cost of each policy will depend on your individual circumstances.

The pay out can be used by your loved ones for whatever they wish and making a claim is a simple process.

What is life insurance and why is it important? Find out all you need to know by watching our short video.

Why do I need life insurance?

Life insurance is essential for financially securing the future of your loved ones if you were no longer present to provide.

If the worst were to happen to you, could your family:

The proceeds from a life insurance policy can be used to help towards many different aspects of life.

How does life insurance work?

Life insurance involves making monthly payments (known as premiums) and after you pass away a lump sum pay out is issued.

The value of the pay out received will depend on the type and level of life insurance cover you arrange at application.

Depending on the type of life insurance you have in place, it may expire within a set period of time, (known as the term).

In this instance, if you do not pass away within the set term, no pay out is made.

However, there are life assurance options which guarantee to pay out.

For more information read our in-depth article on how life insurance works »

What are the main types of life insurance cover?

There are a variety of life insurance types each one tailored to meet a different need.

The policy best suited to your needs will depend on what it is you want to protect.

Term-based life insurance

Level term life insurance provides a lump sum pay out upon your passing.

The value of this pay out does not change throughout the life of your policy making it ideal for covering living costs, replacing an income or leaving an inheritance.

In contrast, decreasing term life insurance provides a lump sum pay out but the value of this sum declines throughout the policy term making it ideal for covering a repayment mortgage.

Both of these policies last for a predefined term and if you do not pass away within this time frame, the policy expires and no pay out is issued.

Life assurance

Whole of life insurance is similar to level term in the sense the pay out amount remains fixed, however, cover lasts for the rest of your life, guaranteeing a pay out.

This option tends to be well suited to those in later life who are in good health.

This is because if the policy is in place for a long period of time, it is possible to pay more into the policy than the sum assured.

An over 50s plan provides guaranteed acceptance for all UK residents aged between 50-85 with no medical information required.

As a result, it is ideal for anyone in this age bracket who is experiencing health issues, however, the maximum sum assured is significantly lower than other forms of life insurance.

Family income benefit

The final and less well-known type of life insurance is family income benefit (or FIB).

Instead of paying out a single lump sum FIB will provide your loved ones with a tax-free monthly income for the remainder of the policy from the date you pass away.

It is ideal for replacing a lost income to cover day-to-day family living costs.

Finally, it is possible to have multiple policy types in place if required.

What does life insurance cover?

Generally speaking, life insurance policies cover all types of death.

Regardless of whether death occurred as a result of an accident or natural causes, it is possible for a valid claim to be made.

Although, occasionally, there are time frames for which a policy must have been in place before a claim can be made, (for example policies that cover suicide may not pay out if death by this cause occurs in the first 12 - 24 months).

Policies that cover suicide will also include a suicide clause of 12 - 24 months. This means that the life insurance policy is invalid if death occurs as a result of suicide within this time frame.

What can a life insurance pay out be used for?

The pay out received from a life insurance policy can be used for whatever the beneficiaries deem fit.

Typically, this includes:

  • Paying off the mortgage
  • Clearing any outstanding debt in your name
  • Covering funeral costs
  • Helping with day-to-day living costs
  • Providing an inheritance

How much is life insurance?

At Reassured we provide life insurance policies from just 20p-a-day.

Although, the exact cost of life insurance is dependent on each individual applicant.

Premiums are calculated based on the risk to the insurer, taking into account:

  • Health
  • Age
  • Smoking status
  • Lifestyle
  • Sum assured (pay out amount)
  • Type and length of cover

The underwriting process will determine the level of risk you pose to the insurer and price your premiums accordingly.

Those posing a higher risk to the insurer will pay a higher premium for their cover.

What is the average life insurance cost per month?

The average cost of life insurance in the UK is estimated to be £31.77[1].

However, this is largely influenced by the age of those who have life insurance in place.

The price of your policy will depend on your personal circumstances, taking into account the aspects mentioned above.

How much life insurance do I need?

The amount of life insurance you require will depend on what it is you are looking to protect.

For those looking to cover a mortgage alone may only require the outstanding value of their mortgage.

Whilst those with a mortgage and children may need to take into account this balance plus how much their dependants will require until they are financially independent.

Taking into account all the aspects within your life you are looking to protect (mortgage, dependants, funeral costs, inheritance) will allow you to determine exactly how much cover you need.

It is also possible to change the amount of cover you have in place without the need for additional underwriting by invoking a special events option^.

This allows you to increase your cover amount if your circumstances change, such as buying a bigger house or having more children.

Whilst your premiums will increase to accommodate for the new cover amount.

How much life insurance do you need?

Enter your financial commitments to understand the level of cover you require.


£121,687 is the estimated average outstanding mortgage per household in the UK.

Our property is generally the largest financial commitment any of us will make.

Your life insurance should cover this significant debt should you no longer be around.


According to Money Advice Service, full-time childcare in the UK now costs £242 a week.

The loss of a parent could result in the need for additional childcare whilst the surviving parent increases their hours to account for lost income.

Your life insurance cover should factor in this additional required outgoing.


The average level of debt (minus a mortgage) in the UK is £15,385.

Factoring in any outstanding debts in your name when arranging life insurance ensures this burden is not passed to loved ones.


You may wish to leave your loved ones an inheritance or lump sum gift upon your passing.

Factoring in the gift amount when arranging your cover will ensure the pay out amount will be sufficient to provide your loved ones with this selfless gesture.


According to SunLife, the average cost of a UK funeral is now £4,417, whilst the total cost of dying is £9,493.

This is a 130% increase over the past 16 years and shows no signs of slowing down.

A significant cost which should be factored into the amount of life insurance you secure.


If you are one of the 65% of the UK who are lucky enough to have savings, this could be used as protection if you were to pass away.

Any pay outs from existing life insurance policies and investments can also be used as financial protection for your loved ones if you were no longer around.

Factor this into your required cover amount.

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Your total cover estimate

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Let us find your best quote.

What happens if I outlive my life insurance?

Unfortunately, with term-based life insurance, outliving your policy will not result in a pay out being issued.

With regards to whole of life assurance and an over 50s plan, it is not possible to outlive your policy as cover lasts for life.

If you choose to end these policies or stop premium payments, cover ceases and all premiums paid in to date will be lost.

When should I think about getting life insurance?

Life’s big events tend to spark the thought of arranging life insurance.

Such as:

  • Having children
  • Obtaining a mortgage
  • Losing a loved one
  • Getting married

However, the younger you are when arranging cover, the more favourable the cost of your premiums.

As a result, even those who have not yet experienced these major life events but intend to in the future may benefit from arranging cover sooner rather than later.

Basically, the sooner you arrange life insurance cover the better.

Simply contact our award-winning team today and start your journey to secure your loved ones' future.

Is life insurance a good idea?

Life insurance is vital for anyone with dependants but who don’t have enough savings in place to cover their loss.

This could be children, a partner or other family member who either rely on your income directly or who would rely on the value of your estate to cover the mortgage or outstanding debts in your name.

For anyone in this position, it is essential to have life insurance protection in place.

Life insurance may also be beneficial for anyone with significant savings as a means of covering inheritance tax.

The policy could be written in trust which can avoid/minimise inheritance tax.

The pay out could then be used to cover the shortfall of inheritance tax your loved ones will have to pay on your estate.

Impaired life insurance

Occasionally, applicants will be denied life insurance due to poor health or a pre-existing medical condition.

At Reassured, we have a dedicated team of impaired risk life insurance specialists to help with such applications.

Our team has a fantastic track record, helping 45% of applicants obtain life cover protection even when denied elsewhere.

So, do not be disheartened if your health is less than perfect.

Simply get in touch and our impaired team can help you find the cover you need.

How long do you need to have life insurance before you die?

Provided all the information you provided during the application was accurate, a valid claim can be made at any point once the policy is live.

The majority of policies include a 2-year contestability clause, meaning that if you were to pass away within the first two years of the policy, the insurer has the right to investigate.

This allows them to determine whether all the information was true at the point of application.

This process can be carried out by obtaining your medical records, autopsy notes and other forms of investigation.

Most policies also include a suicide clause of 12-24 months.

This means that the life insurance policy is invalid if death occurs as a result of suicide within this time frame.

However, for standard life insurance, regardless of whether death occurs as a result of an accident or natural causes, a valid claim can be made.

A final caveat to this is over 50s plans.

These tend to have a waiting period of 2 years whereby if death occurs due to natural causes within this period, a claim can not be made, (but all premiums paid in will be refunded).

Death as a result of an accident within this timeframe will result in a pay out.

Full disclosure is essential

When arranging your life insurance it can be tempting to withhold information to allow you to benefit from more favourable premiums.

However, any information which is undisclosed or false may result in your life insurance policy becoming invalid.

As a result, your loved ones may be denied a pay out upon your passing.

In addition to this, if found to have lied on your application or withheld information, you will be considered to have committed insurance fraud.

Therefore, it is essential to be truthful and forthcoming with all information during the application process.

Our staff are not here to judge and will be completely impartial with all information they receive.

Terminal illness cover as standard

All term life insurance policies arranged through Reassured come with terminal illness cover as standard.

This means if you are diagnosed with a terminal illness and predicted to pass away within 12 months, you can make an early claim.

This pay out can then be used to fund things like private medical treatment, enable you to put your finances in order or to simply enjoy your final days with those you love.

Guaranteed premiums

All life insurance policies arranged through Reassured provide guaranteed premiums throughout your cover.

This means you never have to worry about the cost of your monthly premiums increasing during the term.

Compare life insurance, (find your best quote)

The type and cost of life insurance can vary significantly between different insurers.

Therefore, to ensure you receive the best possible deal, it is essential to compare quotes from multiple insurers.

At Reassured, we can compare quotes, saving you valuable time and money.

We can complete the application on your behalf, explain any jargon and provide you with all the information you need to make an informed decision.

And the best bit? Our award-winning broker service is fee-free to use.


[1] https://www.protectline.co.uk/blog/average-life-insurance-cost-uk/

^Please note, this may not be available on all policies/in all circumstances

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