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.
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.