Life Insurance

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 Life insurance protects your family against debt when you are gone. Since there are so many levels of life insurance with different kinds of cover, be sure to go over you options carefully, select what is right for you and your family. It is also important to know that you can change your policy at any time if your life circumstances change.

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Here are some of the different types of life cover available in the UK:

1. Level Life Insurance is the most uncomplicated method to give your family financial help. Level life ensures a certain amount of cover that stays the same throughout the life of the plan. If you die, your family receives that guaranteed amount in a lump sum. The level of the cover you require and how long you want the cover to last is related to your personal situation. The level of cover you purchase determines the cost. Note that level life insurance has no cash-in value if you should choose to stop the cover.

2. Decreasing Life Insurance is meant to cover loans like your mortgage and other large loan payments that decrease over time. Since the amount you owe on the loan or mortgage reduces over time, so does the premium on your decreasing life insurance policy. Decreasing life plans are generally lower cost than other styles of life insurance. If you die during the term of the insurance, it pays out a lump sum to your family but never offers any cash value.

3. A whole life insurance plan provides your family with a guaranteed amount of money upon your death. The difference between this and level life is that you can choose to have your cover increase by 5% every year to help guard against rising costs in the economy.

4. Guaranteed whole life provides cover for the rest of your life and not just for a predetermined fixed term as in the other types of insurance described. A cash sum is paid to beneficiaries when you die. You can choose the amount of coverage and also opt for the 5% yearly increase. These plans can also be put in a trust so that your family does not have to pay inheritance taxes.

5) Term life insurance runs for a fixed term, and pays out if the policy holder dies with that term. Term Life Insurance is generally regarded as more expensive than Decreasing Life Insurance when used to cover items such as mortgages.


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