Life
Insurance

What is it?

Life insurance is a policy that will pay out a lump sum to your family or beneficiaries if you pass away. This will give you peace of mind that you’re family has financial security after you have gone.

You might choose the cover to pay off a mortgage, leave a lump sum to family or need it to cover funeral costs. There are different types of policies.

How does it work?

When you take out a life insurance policy you pay a monthly premium, and the insurer agrees to pay a sum of money to your beneficiaries if you die. It’s usually over a fixed term, however, some policies can run for the rest of your life.

You choose how much cover you need, and then how long you want to be covered for. You can then choose decreasing, level or increasing cover depending on what suits your circumstances the most.

Your health can affect the premium you pay. So, there is usually a medical questionnaire to complete before the insurance provider will approve your cover. Once you are covered though, any changes to your health don’t need to be disclosed to the insurer.

You can nominate your beneficiaries by placing your policy into trust. By doing this, the insurer will know who to pay in the event of your death. They will also be able to pay your nominated beneficiaries quicker than if the sum assured goes through probate. As it keeps the sum assured out of your estate, there is also no tax for your beneficiaries to pay on the lump sum.

Why take out life insurance?

Family – If your family depends on your income, the loss of that income can have a devastating effect on their future. A Life Insurance policy that pays a lump sum will give you peace of mind for your family’s future.  Taking care of your family is the main reason why you should take out an insurance policy. Whether it may be for Income Protection to protect your wage, or for a Life Insurance policy. 

Mortgage – Mortgage protection is designed to pay off an outstanding mortgage in the event of your death. This gives you peace of mind that your family doesn’t have the burden of mortgage payments in the future.

Funeral Costs – The average funeral cost is over £4,000, so a life insurance policy can cover the costs. So your loved ones don’t have to struggle to pay for your funeral and/or medical costs. 

How much does life insurance cost?

The cost of a life insurance policy will vary depending on a few factors. These factors are…

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Age

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Health

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Amount of cover you need

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Length of your policy

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FAQ’s For Life Insurance

Do I need life insurance?

Life insurance is all about protecting your family and loved ones in the event of your death so they have no financial issues. A life insurance policy can cover the funeral cost, pay off the mortgage or even just leave some cash for your family. If you need life insurance or not, that is down to your decision and will depend on your circumstance however the idea of having extra funds after your death will be beneficial to those around you.

What is Whole Of Life Cover?

Whole of Life is a type of insurance that does not have a term length. It will run for as long as you live, as long as you have kept up with the monthly premiums.

What is the Term cover?

Term life insurance is cover for a specified time. It will pay out a cash lump sum if you were to pass away during the term of the policy. The maximum age you can cover yourself up to is 90.

How much life insurance can I get?

There is no limit to how much life insurance you can get. Typically the higher the amount would mean a higher premium. Depending on your age, and how much cover you apply for you might be subject to medical or financial underwriting.

What's the difference between joint or single cover?

Single life insurance policies will cover one person and will payout on the death of the insured person. Joint life insurance can cover two people and can payout on the 1st death, or the 2nd death, however, it will only pay out once.

How long does it take to payout?

The length of time to payout can vary, but would usually take around 30 days. Some insurers will offer an advance payment to help cover funeral costs whilst you wait for the remainder of the lump sum to payout. You can speed the process up by having the life insurance policy placed into trust.

What is a trust?

Placing a life insurance policy into Trust has two main benefits. Firstly, it helps to speed up the claim process, so that the cash lump sum gets paid to the beneficiaries a lot quicker. Secondly, as the lump sum is written into Trust, it is not subject to any inheritance tax, so your beneficiaries have no tax to pay on the pay-out