Life Insurance
Protect your family with life insurance
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What is life insurance?
Life insurance is a financial product available to adults in the UK who are looking to protect their family from any financial commitments they may have (mortgage/debts/child costs) or to leave money to family members for their future. A life insurance policy pay-out is set-in-motion upon the death of the policyholder - in which case the insurer is informed, and the tax-free pay-out will be released to the beneficiary(s) (family). For example, if you take out a policy for £250,000 and nominate your partner as beneficiary; when you die, the insurer will pay your partner £250,000
To receive this tax-free pay-out you, the policyholder, will have been contributing a set amount of money (often referred to as the premium) monthly or annually.
You will likely set up your policy through an insurance broker who in turn will set up an agreement between you and an underwriter (the people who actually insure you). The money you pay each month (your premium) will be paid to the underwriter the policy is with.
It’s also important that tell the truth in your application and don't break the agreement after the application. An example of this might be that you didn’t smoke when you applied, but you took it up a few months/years after and didn't tell your insurer, therefore voiding your agreement. When you die, this means no money will be paid out to your loved ones.
To receive this tax-free pay-out you, the policyholder, will have been contributing a set amount of money (often referred to as the premium) monthly or annually.
You will likely set up your policy through an insurance broker who in turn will set up an agreement between you and an underwriter (the people who actually insure you). The money you pay each month (your premium) will be paid to the underwriter the policy is with.
It’s also important that tell the truth in your application and don't break the agreement after the application. An example of this might be that you didn’t smoke when you applied, but you took it up a few months/years after and didn't tell your insurer, therefore voiding your agreement. When you die, this means no money will be paid out to your loved ones.
Working with an Independent Qualified Advisor
Although the agreement is between you and the insurance underwriter, it's often common and beneficial to work with an Independent Qualified Advisor, who will act on your behalf to find the best deal on the market for your circumstance.
The advisor will act as a bridge between you and the underwriters, so they will ask you the questions required by the underwriter to generate a quote.
The advisor will be rewarded by getting a pay-out from the underwriter, often there would be no cost to you for the use of their service and you get the benefit of their access to the whole market, which won’t be accessible to you without them.
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How does life insurance work?
A life insurance policy is an agreement put in place between you (the policy holder or insured) and the underwriter (a company that specialises in generating the life insurance policy.)
Underwriters gather information on thousands of customers to determine the risk of insuring an individual. When you take out life insurance, your insurance broker will ask you a series of questions. The answers to these will tell the underwriter how risky it is to insure you and therefore how much to charge you each month.
You can set the timeframe in which you want the agreement to last and the amount you want cover for.
Depending on what you are looking to cover you might use that as a base of how much cover and the length of time you want to pay towards the policy.
Underwriters gather information on thousands of customers to determine the risk of insuring an individual. When you take out life insurance, your insurance broker will ask you a series of questions. The answers to these will tell the underwriter how risky it is to insure you and therefore how much to charge you each month.
You can set the timeframe in which you want the agreement to last and the amount you want cover for.
Depending on what you are looking to cover you might use that as a base of how much cover and the length of time you want to pay towards the policy.
If you wish to cover a mortgage, then you might set the policy pay-out to the outstanding mortgage balance and the length of time left on the mortgage.
If you are looking to protect your children, you may calculate the years until they become financially independent and the cost of each of those years to cover their living expenses, additionally you may consider covering university fees or a deposit on a property.
For example, if you owe £250,000 on your mortgage and want that to be paid off in full when you die, you would take out cover for £250,000.
Similarly, if you have a child who is 2 years old and want to leave enough money to cover their upbringing until they reach 18, you would need to leave enough money to cover 16 years of their life. Let’s say you want to leave £20,000 per year for their care, over 16 years that’s £320,000
You can of course do both and so here, would need £250,000 + £320,000 worth of cover. Whilst these amounts can sound very big, they’re completely common in life insurance terms
If you are looking to protect your children, you may calculate the years until they become financially independent and the cost of each of those years to cover their living expenses, additionally you may consider covering university fees or a deposit on a property.
For example, if you owe £250,000 on your mortgage and want that to be paid off in full when you die, you would take out cover for £250,000.
Similarly, if you have a child who is 2 years old and want to leave enough money to cover their upbringing until they reach 18, you would need to leave enough money to cover 16 years of their life. Let’s say you want to leave £20,000 per year for their care, over 16 years that’s £320,000
You can of course do both and so here, would need £250,000 + £320,000 worth of cover. Whilst these amounts can sound very big, they’re completely common in life insurance terms
Further reading:
Why might you want to take out life insurance?
01
Fill in our form by clicking "Get started" below
02
Speak to an advisor about your requirements
03
Answer questions regarding your health, lifestyle and personal information
04
Receive quotes and agree one you like
05
Complete paperwork required for life insurance policy
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Start paying your premium and ensure peace of mind that your family are protected
