As experts in finding you the right life insurance, we know you might have lots of questions. So, to help you, here are answers to some of the most common questions about life insurance.
If you’re rather just compare life insurance online, visit our life insurance page to get a quote.
What is life insurance?
Life insurance is designed to provide financial support to your dependents in the event of your death. If you die within the term of your insurance, the policy will pay out a lump sum to your beneficiaries.
The money can be used for a wide range of purposes:
- To replace your income
- To repay your mortgage
- To pay for funeral costs
- To repay other debts such as loans or credit cards
- To meet monthly commitments such as rent or utility bills.
There are different types of life insurance that provide different levels of cover. However, each essentially works in the same way. Should you die within the term specified, as long as all requirements have been met, a sum of money will be paid to your dependants or loved ones.
Is life insurance worth it?
Yes. Putting life insurance in place gives you peace and mind and the confidence that your loved ones will be protected financially should the worst happen. You will be reassured that your family will receive a lump sum to support them at a stressful and emotional time.
Figures from the Association of British Insurers (ABI) show that providers have an exceptional record when it comes to paying life insurance claims.
In 2019, insurers paid out more than £3 billion in life insurance claims paid, equivalent to £15.8 million paid every single day. 97.4% of all term life insurance claims were paid, with an average value of £77,535.
Do I need life insurance?
There are lots of reasons why it is a good idea to make sure you have sufficient life insurance in place.
You’re a parent
Putting life insurance in place means a lump sum will be available to provide financial support when you are no longer around. It can ensure your children can remain in the family home, and that school or university fees can be paid.
You can even put your life insurance in trust, enabling you to nominate people you trust to look after the money and to make sure your wishes are carried out.
You have a mortgage
Your mortgage is probably your biggest financial commitment. So, if something happened to you, would your spouse, partner, or family be able to keep up with the mortgage repayments?
If not, making sure you have enough life insurance in place to repay the mortgage can provide you with the peace of mind that your dependents can remain in your home if you pass away.
You’re the main wage earner in your household
If your dependents are mainly reliant on your salary, what would they do if you were no longer around?
Life insurance ensures they receive a lump sum which can provide crucial financial support.
You’re in a household where you share finances
If you are married, in a civil partnership, or you have a partner, your lifestyle may very well be based on your joint income. Perhaps you share the rent, mortgage, or bills? Perhaps you have a joint account?
If you do manage your money jointly, your spouse or partner may struggle to cope financially if something happened to you.
Do I need life insurance if I have no dependants?
There are lots of reasons why you might need life insurance. However, if you have no debts, no dependents, or you have savings that mean your dependants wouldn't struggle financially in the event of your death, you may not need to put cover in place.
Do I need life insurance if I have a mortgage?
Ensuring your dependents can repay your mortgage gives you the peace of mind that they won’t have to sell your home if something happens to you.
If you have a repayment (capital and interest) mortgage, Mortgage Protection Life Insurance (sometimes called Decreasing Term Assurance) is designed to pay off your mortgage if you die within the term. Here, the amount of life insurance decreases in line with the outstanding balance on your mortgage.
If you have an interest only mortgage, or you just want a fixed amount of cover, Level Term Assurance might be preferable. Here, the policy provides a constant level of cover throughout the term – for example, £100,000 over 25 years.
How much life insurance do I need?
- The amount of protection that you need will depend on your specific circumstances. You’ll need to consider:
- Your mortgage and other debts
- Your spouse/partner
- Your children
- Your income and what contribution you make to your household expenses
To help you to ensure you have the right amount of life insurance for your needs we've designed an easy life insurance calculator that can help you to work out how much cover you need.
Just complete your details to get an idea of how much cover might be appropriate.
How much does life insurance cost?
Life insurance often costs less than you might imagine. Many people can obtain cover for less than £10 per month, but the cost will depend on:
- Your age
- The amount of cover you want
- The term of your policy
- Whether you smoke
- Your medical history
If your job is risky, or you engage in risky hobbies or pastimes, then this may also affect the cost of your cover.
At I’m Insured, you can easily compare life insurance from many of the UK's most well-known providers. And, we even take less than the standard level of commission so you can save money on the cost of cover.
Can I have more than one life insurance policy?
Yes. You can take out as many life insurance policies as you wish.
For example, you might have a life insurance policy designed to pay off your mortgage if you die during the term. You may also have separate cover to provide financial support to your family to replace lost income, or to pay for funeral costs.
Additionally, you may want to take out additional life insurance cover if your circumstances change; for example, if you move home or have a baby.
Can I get life insurance if I already have a medical condition?
Yes. When you apply for life insurance, the insurer will ask some questions about your current and previous medical history. Your premium and the amount of cover offered will reflect this.
When you apply for protection, it is important to answer all questions truthfully and declare any medical conditions or symptoms. If you don’t, your policy could be cancelled, or a claim might be declined.
At I’m Insured, we specialise in helping people with existing medical conditions to get the right life insurance. We can help you if you have conditions including:
- High blood pressure
- Raised cholesterol
- Irritable bowel syndrome
- Mental health problems, including anxiety and depression
Where can I get life insurance?
Using an online life insurance comparison service can help you find the right cover at the right price.
We work with many of the UK’s leading life insurance providers, meaning you can find the very best terms for the protection you need. Simply head to our life insurance page to get a quote.
1 in 10 considering stopping or reducing their protection premiums as the cost of living bites
June 29, 2022
If you think insurers don’t pay out, you’re wrong. Here are the statistics to prove it
June 9, 2022
5 costly reasons you might pay more for your protection (and how you can save money)
January 28, 2022
5 strong reasons you might need more life insurance
January 11, 2022
10 financial new year resolutions you should make for 2022
December 16, 2021
10 practical ways to manage your money successfully this Christmas
December 1, 2021