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What is Life Insurance?

• Life insurance is a valuable insurance product that ensures financial security for your loved ones in the event of your death. It provides a tax-free lump sum or ongoing payments to a chosen beneficiary. This money can be used to cover various expenses such as rent, mortgage, or university fees. Additionally, some policies offer early payment if you are diagnosed with a terminal illness. To enhance your coverage, you can also consider adding critical illness insurance, which provides additional protection if you become ill or injured and are unable to work.
  

How to buy life insurance

• When it comes to purchasing life insurance, you have three options: buying directly from the insurer, using an intermediary or broker, or seeking advice from an independent financial adviser. Using a comparison site like CompareMyHealthInsurance.co.uk allows you to learn about the different companies and policies to find the best one for your needs. Our service is completely free, and you can be assured that you won't find a better price by going directly to the insurers.
  

• While life insurance is not mandatory, it is highly recommended if you have dependents or debts like a mortgage. Consider the financial needs of your loved ones if you were no longer there to provide for them. Life insurance can cover day-to-day bills, mortgage or rent payments, school or university fees, and more. If these costs cannot be covered by savings, life insurance can provide the necessary financial support. It can also be used to leave an inheritance, cover funeral costs, or pay inheritance tax bills.
  

How much cover do you need?

• The amount of life insurance cover you need depends on the lump sum payout you want your beneficiary to receive. Calculate the costs you need to cover, such as bills and debts, to determine the appropriate coverage. You can also choose between joint or separate life insurance policies. Joint policies usually have lower premiums but only pay out once, leaving the surviving partner without coverage. Separation can complicate the division of a policy, so it's important to consider this aspect as well.
  

Types of life insurance

• There are different types of life insurance policies available. Term life insurance covers a specific period, such as 10, 20, or 30 years, and is ideal for covering expenses like raising children or paying off a mortgage. Whole of life insurance, on the other hand, covers your entire life and is designed to protect against funeral costs, inheritance tax, or leaving money to loved ones.
  

• Within term life insurance, there are two common types: level life insurance and decreasing life insurance. Level cover provides the same lump sum payout throughout the term, while decreasing cover is suitable for repayment mortgages as the coverage and premiums decrease over time.
  

• To protect against inflation, some policies offer inflation protection, ensuring that your payout sum retains its value over time. However, this may result in higher monthly payments.
  

What is critical illness cover?

• In addition to life insurance, critical illness cover is worth considering. It provides financial support if you are diagnosed with a critical illness like cancer, stroke, heart attack, or a life-changing disability. Critical illness cover is separate from life insurance and adds to your premium, but it can help cover the costs associated with a critical illness that may not be covered by a life insurance policy.
  

• Income protection is another form of cover for illness and injury. Unlike critical illness cover, it cannot be bundled with life insurance. Income protection provides a percentage of your wages as a monthly income if you are unable to work due to a medical condition.
  

• Life insurance is a crucial investment to ensure the financial well-being of your loved ones. Consider your specific needs and consult with professionals to find the best policy for you.
  

• Share your requirements and receive a quote from an FCA regulated life insurance broker today Get a life insurance quote