Securing life insurance doesn’t have to be confusing. Read…
Many people may wonder: Why get life insurance?
The answer is, you probably need life insurance if you have dependents who rely on your income, such as a partner or children.
Life insurance can provide you with peace of mind knowing that they would be financially stable if you were no longer around.
The best type of policy and how long your life insurance should last for will depend on your personal circumstances.
For example, you could choose a term policy which lasts for a set period (up to 50 years) or a whole of life policy which lasts for the rest of your life.
Term-based policies are good for covering things like your mortgage and other debts, so that it will pay out if you pass away before settling these.
It’s important to choose the right life insurance to suit your circumstances. At Reassured, we can help you with this task as well as compare quotes to help you find our best rates.
Quotes are free and without obligation, and start from just 20p-a-day † .
In this guide, we cover some common questions about life insurance:
There’s no one size fits all answer when it comes to life insurance. How long you should get life insurance for will depend on your personal circumstances.
The type of life insurance you require, and its length, could vary wildly from another applicant’s.
Most people will express their concerns about the future when questioned ‘why buy life insurance?’
Circumstances that your loved ones couldn’t control if you were no longer around to provide financially are usually the primary reason for taking out life insurance. Maybe, you're worried about your children’s future without you. Or maybe you want to help your partner can pay the remainder of a shared mortgage.
The reasoning behind life insurance is personal to the policyholder. However, most stem from an anxiety about how those left behind will cope financially when you’re gone.
Therefore, a policy should be long enough to protect what you need it to.
Most commonly, a life insurance pay out is used to help cover:
Mortgage / Rental payments for family
The average outstanding mortgage debt in the UK is £142,755.
Life insurance can be taken out to help cover your remaining mortgage debt should you pass away before it’s paid off.
If you take out life insurance for this reason, then you could choose a term length that reflects your mortgage term.
If you take out life insurance to cover rental payments, then you could choose a term length that ends when your children are financially independent.
Utility bills, council tax and home repairs are all things which need to be taken care of.
It’s worthwhile calculating a realistic yearly amount in household costs and the length of time these will need to be covered for.
The average total debt per adult in the UK is £65,510.
If you've debts which will impact your family, ensure that your term aligns with your payment term.
Day-to-day family living costs, including food and transportation
From being able to get to work, to making sure you family can eat 3 meals a day.
You'll need to make sure the term length covers your family until they can support themselves financially
Childcare and education costs
According to the Child Poverty Action Group, in 2021, the total cost of raising a child to the age of 18 stood at £157,562 for a couple and £208,735 for a lone parent.
It's worth considering your term is long enough for your children to reach adulthood or until they’re financially stable, for example after they have left university.
The average basic funeral cost in the UK is £3,953.
Life insurance can help to relieve some financial worry for your loved ones when the time comes to plan your funeral.
A policy that lasts for the rest of your life, such as whole of life or an over 50s plan, is a good option if you’re in your later years and want to contribute help towards your funeral costs.
A partner’s retirement fund
This can help to supplement the lost income they may have benefitted from before you passed away.
By checking your savings and/or retirement fund, you'll be able to work out how close a partner is to retiring and cover that period accordingly.
To help your loved ones financially in an uncertain future without you.
If your children are under 18, you might want to ensure they have enough funds to be supported through childhood into early adulthood.
To donate to charity
Charitable donations can be made from a life insurance pay out to causes which have meant a lot to you in life.
However, there are other reasons life insurance could be a benefit to you.
Once you have an idea of what future events need to be covered, you can pick the type of life insurance and term length that suits your needs.
The minimum and maximum ages for life insurance will vary between insurers and the different policies.
At Reassured, we’ll help you find the right life insurance and length of cover to suit your circumstances from our panel of insurers.
Many people will ask themselves: what type of life insurance do I need?
There are multiple types of life insurance which all vary in length. Each policy is tailored to meet different needs and what you’d like to protect.
It is important to note that all premium payments must be maintained for all policy types in order to keep your life insurance policy valid.
The table below shows the differences between the policies at a glance:
|Level term||Decreasing term||Whole of life insurance||Over 50’s life cover||Family income benefit|
|Maximum term length||50 years||50 years||Until policy holders’ death||Until policy holders’ death||40 years|
|Exempt from inheritance tax?||No, (but can be written in trust to avoid / minimise 40% inheritance tax)||No, (but can be written in trust to avoid / minimise 40% inheritance tax)||No, (but can be written in trust to avoid / minimise 40% inheritance tax)||No, (but can be written in trust to avoid / minimise 40% inheritance tax)||Yes|
|Fixed premiums (providing no change to coverage)||Yes||Yes||Yes||Yes||Yes|
|Critical illness cover||Can be added for an additional cost||Can be added for an additional cost||Can’t be added||Can’t be added||Can be added for an additional cost|
|Free terminal illness cover included||Yes||Yes||Available with certain companies (check terms and conditions)||Available with certain companies (check terms and conditions)||Yes|
|Max sum assured||£1,000,000||£1,000,000||£1,000,000||£20,000||Varies depending on provider|
|Premium price||Affordable cover from 20p-a-day †||Affordable cover from 20p-a-day ¥||Affordable cover from 27p-a-day ±||Affordable cover from 20p-a-day +||Only available through Reassured Advice, contact us for further information|
Term life insurance through Reassured can last for up to 50 years. This allows you to choose a term length that meets your specific needs.
You’ll need to pay a monthly premium until your policy expires or you pass away.
Many things can influence how long your term should be, such as:
Compare term life insurance through Reassured to find the right cover to meet your needs at our best available price.
We can help you to conduct a full level term vs decreasing term quote comparison.
Whole of life insurance is a form of life assurance, meaning cover lasts for the rest of your life.
This guarantees a pay out to your loved ones no matter when you pass away.
You’ll need to pay premiums until you reach a certain age (such as your 90th) or until you pass away depending on the insurer.
Why not compare whole of life insurance using our award-winning broker service?
In general, there’s no correct age to secure cover and everyone who’s eligible can benefit from having life insurance.
However, taking out life insurance while you’re young and in good health allows you to benefit from the most favourable premiums throughout the entire lifetime of your policy.
Many people decide to take out life insurance once they have reached certain milestones in their life. These include getting married, having children, and getting their first mortgage.
However, even if you've surpassed these, it’s not too late to take out life insurance.
Based upon our award-winning broker service, you can see below an example of the difference in cover between level term, decreasing term and whole of life insurance*:
|Age||Level term (30-year term)||Decreasing term (30-year term)||Whole of life insurance|
*Quotes are based on a non-smoker, in good health, for £100,000 of cover
Some types of life insurance have a maximum age limit that your life insurance should end and your premium payments will stop.
For example, with a term-based policy taken out through Reassured the policy term must expire by your 90th birthday. This means you can’t take out cover that surpasses your 90th birthday.
With other types of life insurance, such as whole of life and an over 50s plan, there’s no maximum age that the term should end because the cover lasts until you pass away.
In some circumstances you can choose the age that your life insurance ends, because that’s when your financial commitments will end.
For example if you take out a term-based policy to cover a 30 year mortgage term and you’re 30 years old at the point of application, then your policy term will end when you’re 60 and the mortgage has been paid off.
For those asking when do you no longer need life insurance? There’s no universal answer for when life insurance should end.
Each policyholder has their own reasons for taking out life insurance. Therefore, the length and age you are when your policy finishes will vary significantly from person to person.
At Reassured we can talk through all your needs to help you find your ideal policy. Simply get in touch.
While everyone who’s eligible can benefit from having life insurance, below are a few groups who may benefit from life insurance the most:
How much life insurance you should take out will be based on your reasons for taking out cover.
For example, if you are taking out a policy to help cover your mortgage, you need to ensure that there’s enough coverage for the remaining payments. If you want to help cover your funeral costs, make sure there’s enough to cover these rising expenses.
Essentially, it depends on what and who you’re looking to protect.
It can be trickier to determine if you have dependents, as the amount of money that may be required to support them can fluctuate and can be affected by inflation.
If your circumstances change with your dependents or if you reach a new milestone, including having another child or obtaining a mortgage, it might be possible to invoke a special events clause to change your coverage, if your policy includes this and you meet the eligibility criteria. Your premiums can be increased or decreased depending on a new level of coverage.
Not everyone will be eligible for this option and it is not offered by all providers, so if this is something you would like make sure to read the terms and conditions of the policy before purchasing or ask one of our friendly team about this option.
You can enter your financial commitments below to understand the level of coverage you require:
If you’re still unsure of how much coverage is required, it’s worth talking it through with a with a broker to get a better idea of what you could cover. Why not do this by comparing quotes with Reassured?
If you already have life insurance in place, you may wish to review your current policy to ensure it still meets all your needs and compare new quotes to see whether you’re getting the best possible deal.
There are multiple factors considered by insurers which impact the cost of your life insurance premium. These typically include:
The price you pay per month will reflect your individual circumstances. This may be higher or lower than the average price or the examples we've provided.
Reassured could offer you cover from as little as £5 per month, equating to approximately 20p-a-day.
How much should you pay for life insurance?
Ideally you should pay the cheapest monthly sum you can for the level of cover you need. Always make sure that your policy is at a price within your budget, as if the policy is unpaid, you will not be covered and you could lose all your payments.
While the average life insurance cost per month ranges from £38.15+, prices can be lower or higher depending on the applicant’s circumstances.
What reason would life insurance not pay out?
Life insurance won’t pay out if there’s incorrect information on the application. This is called a non-disclosure and can prevent a pay out from being made.
If any exclusions have been added to a policy (for example a pre-existing illness) and you pass away due to this reason, a pay out won’t be made.
If you stop paying your premiums or your policy term comes to an end you won’t be covered and no pay out will be made, any claims made will also be unsuccessful.
Do life insurance policies expire?
All term-based life insurance policy will expire after the term has elapsed or if the payments are not maintained. Any whole of life insurance or life assurance policy won’t expire providing the payments are maintained.
What term life insurance is best?
Both level and decreasing term life insurances are suited to different needs. One isn’t better than the other, but one may fulfil your personal needs more effectively.
For instance, if you have large expenses (such as an interest-only mortgage or family living costs) level term life insurance may be more suitable to help cover these costs.
However, if you've a repayment mortgage and this is all you wish to cover, then decreasing term life insurance could be an ideal option to help cover this as it can reduce in line with your remaining mortgage balance until both reach £0.
What happens if I outlive my term life insurance?
If you outlive term life insurance, the policy expires, and you’ll no longer be covered. Your beneficiaries won’t be able to claim on the expired policy when you pass away.
What happens to the money at the end of term life insurance?
If you reach the end of your term life insurance policy, the policy will simply expire and no pay out will be made. Loved ones won’t be able to claim on the expired policy when you do pass away.
If term life insurance comes to an end as a result of your passing, loved ones will need to make a claim and a pay out will be issued.
Does life insurance cover funeral costs?
All types of life insurance can be used to help cover funeral costs, providing the sum assured has enough money remaining to pay these expenses and the coverage doesn’t expire before the policy holder’s death.
Yes, there’s no specified limit on how many life insurance policies you can hold.
However, you won’t be able to take out more financial cover than an insurer deems necessary.
While it’s possible to take out multiple life insurance policies, you should make sure that all the premiums together are still affordable for you, because if you miss payments your cover will cease and you will be left uncovered.
Only take out the level of cover that you need to avoid paying over the odds.
Reassured offer life insurance products from multiple top UK providers. The following providers products are offered at Reassured:
|Level term life insurance||Decreasing term life insurance||Whole of life insurance||Over 50’s life cover|
At Reassured, we can provide you with our award-winning life insurance broker service.
It’s completely fee-free and can help you secure a policy that meets your needs at our best price.
Our service will provide you with all the information you need about the policies we have available and help you compare multiple quotes from some of the UK’s leading insurers.
We can save you time and money by comparing these quotes for free.
Our FCA-regulated service helps you make an informed decision, and we can arrange cover that starts from just 20p-a-day.
Simply get in contact to start comparing life insurance quotes.
+ This information has been gathered from our internal sales data and is the average price of all term life insurance policies (both level and decreasing term) sold to our customers, of all applicable ages, over a 12-month period. The sum assured will vary. Data is correct as of 22/09/2022
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