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Life Insurance.

We’ll break down the jargon to clearly explain the in’s and outs of life insurance.

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A Guide to Life Cover.

Life insurance is a contractual agreement between you and an insurer. In exchange for regular/monthly premium payments, the insurer agrees to pay out a lump sum of money, known as the death benefit, to your beneficiaries upon your passing or if your doctor has given you 12 months or less to live.

In this guide, we will clearly explain the different types of policies, what questions will be asked in the application, and tips when looking for the right policy for you.

In This Guide, you’ll also find.

Do you need financial protection?

Life insurance can help your family cover various expenses such as mortgage payments, outstanding debts, education costs, funeral expenses, and everyday living expenses.

The decision to purchase a policy should be based on your individual needs, financial situation, and long-term goals. Consulting with an adviser can help you determine whether life insurance is right for you.

Mortgage

Pay off the outstanding mortgage

Debts

Pay off the any debt

Gift

Leave a gift to a loved one or charity

Education

Leave a sum for your family to continue with education and hobbies

Income

Replace a spouse’s income with the support of a lump sum

Funeral

Cover the cost of your funeral and relieve the pressure from family

Life insurance is suitable if you have:

  • Dependents, like school-age children.
  • A partner who relies on your income.
  • A family living in a mortgaged or rented home.

In the event of your passing, a life insurance policy can provide financial support for your loved ones. Additionally, you could also consider funeral cover, which pays for funeral expenses – easing the burden on your family during a difficult time.

However, you should check if you’re already covered through your employer’s benefits package, which often includes ‘death in service benefits’ linked to your salary. If so, you might not require an additional policy, BUT keep in mind that leaving your job or being made redundant could leave you without any cover!

Why Life Insurance is Important.

It ensures that your loved ones can maintain their standard of living and financial stability, even after you’re no longer there to provide for them.

One of the key benefits of life insurance is income replacement. If you are the primary breadwinner in your family, life insurance can replace your lost income, helping to ensure that your family’s financial needs are met when you pass.

Additionally, it can be crucial in estate planning by covering inheritance tax and other expenses. It also allows you to leave behind a financial inheritance to your chosen beneficiaries.

Fundamentally, this is an important tool for protecting your family’s future and providing them with financial peace of mind during difficult times.

Click ‘continue to get a quote’ to start your life insurance application.

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Life Insurance Costs.

The cost can vary depending on several factors, which we will explain in more detail. To find out more about the average cost of life insurance, check out our information page below:

Over 40s life insurance 1080

Your monthly payments will depend on things such as:

  • Your age
  • Your health
  • Your lifestyle
  • Whether you smoke
  • Your family medical history
  • The length of the policy
  • Your occupation – if a high-risk job, this might push your premiums up

Life Insurance Cost, Case Study.

James is looking for life insurance to cover his mortgage and to give a lump sum to his wife and two children. James had a stroke 10 years ago but doesn’t suffer from any symptoms. We found James the increasing policy below:

Total Cover Amount: £750,000

Monthly Premium Cost: £41.57

Duration of Policy: Until age 70

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James and family_term life insurance cotss

Medical Conditions and Life Cover.

If you have a medical condition your application may require a few more questions, these additional questions will make sure that you are fully covered.

Alternatively, your policy may exclude a medical condition to help reduce the cost of your monthly premium.

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During the application process, you may need:

  • Diagnosed medical condition(s)
  • Date of diagnosis
  • GP report
  • Medication

Life insurance may also be referred to as high-risk or non-standard life insurance if you are living with a medical condition(s).

At the Insurance Surgery, we have 25 years of non-standard experience and last year alone we helped cover over 548 different medical conditions.

To find out more about the types of medical conditions we can cover, click the button below.

Types of medical conditions

How much cover do you need?

You can use our Cover Calculator below to determine how much cover you need. Additionally, you will need to take into consideration the following:

  • Any outstanding debts
  • Mortgage/rent
  • Number of dependents
  • Take-home pay or income from other sources

What are the different types of life insurance?

Decreasing Insurance

Decreasing life insurance means that the total cover amount goes down over time. It’s designed for things like paying off a mortgage, where you owe less money as time goes on.

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Over 50's Life Insurance

It guarantees acceptance without a medical report. With lower cover amounts and fixed premiums for life, it is often used to cover funeral costs or leave a modest inheritance.

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Joint Life Insurance

Covers two individuals under one policy, typically a couple. It pays a lump sum when the first insured individual dies, closing the policy. It is available as both term and whole-of-life.

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Term Life Insurance

This covers a specified duration, such as 10, 20, or 30 years. Should the insured individual pass away during this period, the policy pays a lump sum to their designated beneficiaries.

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Whole-of-Life Insurance

This type of insurance offers cover for a person’s entire lifespan, provided premiums are consistently paid. It delivers a lump sum to beneficiaries upon the insured’s death.

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Increasing Life Insurance

Or Index-linked is a type of policy where the payout is tied to a financial index, such as the Consumer Price Index and will increase or decrease based on the performance of inflation.

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Pros and Cons of Life Cover.

Decreasing Life Policy.

Let’s say Tim has a mortgage of £200,000 and wants to ensure that if something happens to him, his family won’t have to worry about mortgage payments.

Tim purchased a decreasing term policy for £200,000 with a term of 30 years, which is the same length as his mortgage. As Tim makes monthly mortgage payments over time the outstanding mortgage balance decreases. At the same time, Tim’s death benefit (payout) will decrease in line with his mortgage payments. By the end of the 30-year term, Tim will have fully paid off his mortgage, and the payout from his decreasing life insurance policy will reach £0, coinciding with the mortgage being completely paid off.

 

If Tim were to pass away during the term of the policy, the insurer would pay out the remaining death benefit.

Pro’s:

  1. It is generally a lower monthly premium than term or whole-of-life insurance.
  2. Will pay off outstanding mortgage or debts, helping to cover the cost of larger outgoings.
  3. The cover amount and term length can be tailored to match financial needs.

Con’s:

  1. As the death benefit decreases over time, the payout may not be sufficient.
  2. It may not be suitable for individuals looking for long-term financial protection.
  3. Premiums stay the same throughout the policy but the payout will decrease over time.

Joint Life Cover.

John and Sarah are married with two children. They decide to take out a joint life insurance policy – which will pay a one-time only lump sum if a spouse were to die within the term of the policy.

 

After five years, Sarah tragically passes away. John, as the surviving spouse, receives the lump sum payment from the joint policy. The cover would now end and John would have to reapply for life insurance to cover his children if anything were to happen to him.

Pro’s:

  1. It covers two people under one policy.
  2. Only one direct debit payment goes out instead of two separate monthly payments.

Con’s:

  1. Only one lump sum is provided upon the death of a spouse(s).
  2. Once the policy pays out, it ends the agreement. The remaining spouse may need to apply again, potentially making it more expensive.

Term Life Insurance.

Anthony has a mortgage and 4 sons and wants to ensure that he can pay off the mortgage and provide a small lump sum to each of his four sons, if he were to pass away.

Anthony applies for £300,000 of term life insurance for 35 years. This means that if Anthony were to pass away during the 35 years, the term policy would pay out £300,000 to his sons.

Pro’s

  1. Premiums stay consistent throughout the policy.
  2. The payout (death benefit) is fixed – which allows better financial planning.
  3. Monthly premiums are generally lower than ‘whole of life’ insurance.

Con’s

  1. Due to inflation the fixed amount, may not meet the requirements in the long term.
  2. Once the policy ends, no death benefit is payable.

Whole of Life Cover.

Helen wants to ensure her family’s financial security regardless of when she passes away. To achieve this, she opts for a whole life insurance policy, which provides cover for her entire life without a fixed term.

Pro’s

  1. Whole life insurance will remain in force as long as premiums are paid.
  2. The monthly premium is fixed and guaranteed not to increase.

Con’s

  1. This policy is generally more expensive than term life insurance, as there is no fixed term.

Over 50' Plan.

Rumana wants to ensure that her funeral expenses are covered when she passes away. Rumana decides to purchase an over 50’s life insurance policy.

There is no medical underwriting or health questions required to purchase this type of policy, making it accessible to individuals over the age of 50.

Pro’s

  1. Anyone aged between 50 – 85 years can apply for this type of life insurance.
  2. The premiums are fixed for the duration of the policy.
  3. The death benefit can help to pay for funeral costs, any outstanding bills.

Con’s

  1. The death benefit is generally lower than standard life insurance.
  2. Some plans have a 12-24 month waiting period before the death benefit will be paid out.
  3. The maximum death benefit available for this type of policy is £40,000.00.

Increasing/index-linked Life Cover.

Frances purchased an increasing life insurance policy with an initial cover amount of £250,000 for 25 years.

Each year, Frances is asked by the insurer if he wants his life cover to match inflation.

For example, if the policy matched the 5.2% increase to the 2023 consumer price index, his cover amount (the amount his family would receive when he passes) would increase by £13,000 for that year.

James can decline to index link his policy up to 3 times. When James declines to index link his policy more than that, the policy will revert to standard ‘Term’ life cover.

Despite the increasing death benefit (cover amount), his monthly premium remains fixed throughout the policy’s duration.

Pro’s

  1. The monthly premiums are fixed throughout the policy.
  2. You can opt in or opt out of the annual increase/decrease.
  3. This cover stays relevant to the cost of living.

Con’s

  1. If you opt out of the annual index linking more than 3 times the policy will return to a standard term life insurance policy.
  2. If a large financial crash were to happen the policy may decrease with deflation.

Price Match Promise.

As an award-winning specialist Insurance Broker for those with medical conditions or dangerous occupations, we will never be beaten on price. Our Price Match Promise means we will find you the right cover for your personal circumstances at the lowest possible price.

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Facts About Life Insurance.

Life insurance can serve multiple purposes, including income replacement, wealth transfer, estate planning, and business succession. But how does life insurance shape up with the UK population?

  • 7.5 million families in the UK have no life insurance or critical illness cover.
  • The average life insurance policy in the UK covers only about £40,000.
  • 28% of UK adults believe life insurance is too expensive.
  • Life insurance policies tend to be higher among older age groups.

Data sourced from: ABI (Association of British Insurers) | MoneySuperMarket | Office of National Statistics

life cover terminology.

Understanding life insurance terminology is essential for policyholders to make informed decisions about their cover, we have broken down the meaning for some of the most used terms: 

  • Premium (the monthly amount paid for cover).
  • Beneficiary (the person or entity designated to receive the death benefit).
  • Death benefit (the amount paid to beneficiaries upon the insured’s death).
  • Policyholder (the person who owns the insurance policy).
  • Underwriting (the process of evaluating risk and determining premium rates).
  • Term (the duration of which the policy is live and will payout).

Benefit From Our Support Today.

By choosing The Insurance Surgery, you can rest assured that you will receive guidance and support throughout the process. Our commitment to transparency, expertise, and exceptional customer service sets us apart, ensuring you receive the cover you need at a fair and affordable price.

 

For a life insurance quote, contact us today on 0800 083 2829 to schedule a free consultation and take the first step towards protecting yourself and your loved ones financially.

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Frequently Asked Questions

We answer your most frequently asked questions.

If you take out a whole life insurance policy, it will pay out a lump sum on your death. If you take out a term life insurance policy, a lump sum will only be paid if you die during the time period covered by the policy. If you die after the term policy ends, your family won’t get anything.

Yes, you can take out life insurance on a family member, but you must be able to prove that their death would cause you financial loss. This is called insurable interest. For instance, if that family member owes you a large sum of money or you would have to pay for their funeral and other expenses, you may be able to take out life insurance on them. However, insurance providers vary in their approach to this, so it’s best to speak to an advisor.

This will vary depending on your family’s personal circumstances. Factors that can affect the amount you pay each month include age, job, health, coverage required.

Yes, you can take out life insurance when you’re pregnant. In fact, starting a new family is one of the main reasons that people consider life insurance.

If you have previously been declined for life insurance, there is still hope. We have a strong track record and are experts at finding insurance policies for people who may have been rejected by an insurer. Our relationships with lenders means that we have more options available to us than just the high street insurers.

If you already have life insurance, you may have suitable cover to protect you and your loved ones. If you’re unsure about your policy, please speak to a member of our team – we can look at your current policy details and confirm what current cover is in place.

If we can find you a better life insurance deal that offers better cover, or lower premiums we will make our recommendations. We will only ever suggest a switch to a new life insurance provider if we think that it is the right option for you.

Life insurance is unique – just like you.

Life insurance for parents.

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Life insurance for Men.

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Life insurance for Women.

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Life Insurance for Self-Employed.

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Income Protection.

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Life Insurance for Smokers.

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For more information, check out our latest blogs.

*Terms and Conditions.

These terms and conditions are promoted by the Insurance Surgery, whose registered office is at 2nd Floor Pickford Street Mill, Pickford street, Macclesfield, SK11 6JD.

To be eligible for a gift card you must be a UK resident aged 18 or over.

In order for you to receive the voucher, you will need to have a minimum monthly premium of £20 and the policy to be live for a minimum of three months.

You must make all payments to your policy each month and in full.

If the policy taken out falls into arrears or lapses, then you will not be eligible for a gift card.

This offer is valid until 31st March 2025. However, should we decide to extend the offer, we reserve the right to do so, updating our terms and conditions accordingly.

The gift card is issued via Lifestyle and can be used at more than 190 of the UK brands. For more details about the brands included, please visit thelifestylevoucher.co.uk.

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You will be sent a link to claim your gift card. The gift card will expire 2 years after being issued and any outstanding balance will be lost; No cash alternative will be offered.

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