NHS employees actively contributing to the NHS pension scheme are entitled to death in membership benefits[1].

This includes life assurance and pension benefits.

If you pass away during your employment (and even after retirement), your loved ones will be paid a lump sum benefit.

Therefore, if you’re eligible, you may wish to factor in this lump sum amount when calculating how much personal life insurance you may need.

This is a helpful guide from Reassured on life insurance for nurses looking for cover on top of what they receive as part of the schemes.

At Reassured, we make arranging personal life insurance as effortless as possible, so that you can get back to enjoying your much-needed downtime.

Our dedicated life insurance consultants are here to answer any of your questions and provide all the information you need.

Read on to learn more about life insurance for nurses...

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Life insurance for NHS staff

As mentioned, as a nurse you may already be entitled to death in membership benefits as part of the NHS pension scheme.

The scheme provides a lump sum pay out and pension benefits to your loved ones if you were to pass away during the membership.

The amount you receive will depend on your circumstances at the time of your passing but is usually a multiple of your salary or pension.

In April 2020, the Coronavirus Life Assurance Scheme was established to protect the families of frontline NHS and social care workers, whilst they bravely continued to work during the COVID-19 outbreak.

The scheme offered a £60,000 pay out to families of those who passed away as a result of COVID-19.

It’s still possible to make a claim for deaths that occurred between April 2020 and March 2022, up until September 2023.

However, the removal of this government benefit further emphasises the importance of having your own life insurance protection in place.

How much life insurance do you need?

Work out how much life insurance you may need based on your current financial commitments and what you want your policy to cover. Simply fill in the fields which apply to you for an instant calculation.

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£137,934 is the estimated mortgage debt per household in the UK.

The purchase of a home is likely to be the largest financial commitment any of us will make in our lifetime. Your life insurance should cover your remaining mortgage balance to allow your loved ones to stay in the family home should anything happen to you.

Source: Moneynerd.co.uk
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The average monthly household budget in the UK is £2,548 (that’s £30,576 per year), which is spent on transport, food & drink, utilities (gas, electricity, water etc), clothing, council tax and leisure activities.

With energy prices hitting a record high and the cost of living rising sharply in the UK, you may wish to factor in utility bills and family living expenses into your cover.

Source: Nimblefins.co.uk
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The average personal debt of UK adults has risen to £34,566 (not including mortgage debt), with credit cards, personal loans and overdrafts being the most common forms of debt.

Factoring in any debts into your life insurance cover means that, if they need to be paid back from your estate after your passing, your loved ones won’t miss out financially.

Source: Money.co.uk
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According to SunLife, the average cost of a funeral in the UK is £3,953 (with the overall cost of dying at £9,200).

Funeral costs have increased by 116% since 2004 and are a significant cost which should be factored into the amount of life insurance you secure.

Source: SunLife.co.uk
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When factoring in cover for your children, you may wish to calculate the amount based on how long it is until they reach financial independence.

This could include childcare (£7,000 per year for part-time care), school expenses (£1,519 per school year for uniforms, lunches, stationary etc), as well as an additional sum for further education (this could be a contribution of up to £5,000 per year).

Sources: Daynurseries.co.uk, Primarytimes.co.uk & Savethestudent.org
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2 in 5 adults say they are relying on an inheritance to fund their retirement.

Factoring in an inheritance to your sum assured could allow loved ones to live a more financially comfortable life. Alternatively, you could leave a cash gift to a charity of your choosing.

Source: Moneyage.co.uk
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If you’re lucky enough to have your own savings or are part of the 30% of UK residents who already have a life insurance policy in place, this can provide financial protection for loved ones.

By entering your current cover, savings or death in service amount you can reduce the sum assured you require.

Source: Scottishbusinessnews.net
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Individual life insurance for nurses

Firstly, a personal life insurance policy can be tailored to your specific needs and budget.

You’d have more control over the following aspects:

  • The policy type
  • Cover amount
  • Term length
  • Pay out distribution

Having an individual policy could also help ensure that your loved ones are provided with the utmost protection during and after you employment with the NHS.

This offers protection in case you were to retire early and your death in service benefits with the NHS pension scheme are reduced.

Or, if you were to leave the nursing occupation and your death in service benefits no longer apply.

A life insurance pay out can help ensure that your loved ones are able to afford:

  • Mortgage or rent
  • Daily living costs or household bills
  • Funeral service
  • Outstanding debts
  • Childcare fees

Cost of life insurance for nurses

The cost of your life insurance will depend on your individual circumstances.

Life insurance premiums are calculated based on the level of risk posed to the insurer.

The following factors are taken into account as standard:

  • Age
  • Health/medical history
  • Smoking status
  • Lifestyle
  • Policy type
  • Length of cover
  • Level of cover (sum assured)

Some insurers may consider nursing as a high-risk occupation and therefore may charge higher premiums.

That’s why it’s important to compare quotes from a variety of insurers.

You can use our award-winning, no-fee life insurance broker service to do this.

Life insurance arranged through Reassured could start from a few pounds a month.

Life insurance for nurses application

The COVID-19 outbreak has placed emphasis on the risks that frontline nurses and healthcare workers face.

Going forward, insurers may take into account the threat of emerging and re-emerging infectious diseases.

As a result of the outbreak, many insurers have introduced a set of new coronavirus related health and travel questions for all new policy applications.

Therefore, making it more important than ever to compare quotes to receive the best available deal.

Read on to learn the different life insurance policy options.

Term life insurance

This type of policy provides a cash lump sum pay out if you pass away whilst cover is in place.

The sum assured can be up to £1,000,000 depending on your needs.

You’d be able to specify the term length of the policy, up to 40 years.

Term life insurance can help ensure your family receive the financial protection they need if the worst were to happen to you during your working life.

Particularly if you have dependants that rely on your income as a nurse.

There are two types of term life insurance; level and decreasing.

Level term

  • Level term policies provide a fixed sum assured throughout the term of the policy
  • More common for helping cover an interest-only mortgage, as the sum assured remains fixed to cover the total value of the property and the mortgage can be paid in full
  • Generally more expensive than decreasing term cover
  • Can be taken out as a joint policy
  • Can be written in trust
  • You could outlive the policy

Decreasing term

  • Decreasing term policies provide a decreasing sum assured throughout the term of the policy
  • More common for helping cover a repayment mortgage, as the sum assured can decrease in line with the remaining balance of the mortgage
  • Generally the cheapest form of cover
  • Can be taken out as a joint policy
  • Can be written in trust
  • You could outlive the policy

At Reassured, we have a team of highly experienced consultants who are happy to answer any questions and provide information you need regarding your life insurance options.

Family income benefit

Family income benefit (FIB) key points:

  • Helps long-term family budgeting
  • Provides loved ones with a regular, tax-free monthly payment
  • Fixed, low-cost monthly premiums
  • Medical questions asked
  • Monthly pay out up to £5,000
  • Term period from 5 to 40 years
  • Payments continue every month until the end of the policy term

Family income benefit or FIB is another form of life insurance that provides cover during a specified term.

The difference is that instead of a cash lump sum pay out, FIB provides a regular tax-free monthly income to dependents.

Essentially, FIB replaces a lost income and helps to ensure that loved ones can continue to pay the mortgage or rent, cover daily living costs and pay for childcare.

Whole life insurance

Whole of life insurance key points:

  • Protection in place for the rest of your life
  • Guaranteed cash lump sum pay out
  • Medical questions asked during application
  • Level of cover up to £1,000,000
  • Premium payments for the rest of your life (or until a certain age)
  • Includes terminal illness cover as standard

Whole of life insurance is a form of life assurance, which means a pay out is guaranteed when you pass away.

As discussed, life assurance is available for nurses with an active membership with the NHS pension scheme.

Though the pay out amount is variable depending on your circumstances at the time of your passing.

A separate, personal whole of life policy could be arranged with a larger, fixed sum assured to ensure your loved ones have the full amount of financial protection (or to an enjoy as inheritance).

Whole of life is most suited to those in the later stages of life and in good overall health.

This is because premium payments are required for the rest of your life, and therefore it’s possible to pay more into the policy than is paid out.

Whole of life insurance can be arranged through Reassured from just 27p-a-day ± .

Joint life insurance

Joint life insurance covers two lives simultaneously on one policy.

A joint policy could save you approximately 25% on your premiums, as it pays out only on the first or second death.

Critical illness cover

Critical illness cover provides a tax-free lump sum pay out if you’re diagnosed with a serious, yet non-life threatening illness.

Critical illness cover can be added alongside a life insurance policy for an additional cost.

Illnesses include certain cancers, stroke, MS and heart attack.

Writing your policy in trust

As mentioned, having your own personal life insurance provides you with some control over how the proceeds are spent after you pass away.

You can do this by writing your life insurance policy in trust.

This is a free option where you’d place a person you trust in charge of your policy.

The trustee will then manage the pay out when the time comes and distribute the funds according to your wishes.

At Reassured we provide a free trust service on the majority of the policies we arrange, helping you through the application and answering any questions.

Life insurance for nurses quotes

Searching for suitable life insurance and comparing quotes is a time consuming and sometimes daunting task.

But it doesn’t have to be, as at Reassured we can compare multiple quotes to help you find the best price from our panel of leading insurers.

Our service doesn’t stop there as we also guide you through the application process and answer any of your questions.

Our FCA-regulated and award-winning broker service is completely fee-free.

Get in touch with our dedicated team today to get started.

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Sources:

[1] https://www.nhsbsa.nhs.uk/nhs-pensions

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