If you were to die how would your family cope financially. As well as any outstanding mortgage, would they have credit card debts or personal loans to pay or even school and university fees? And would they have enough income to support the lifestyle they are used to? A lump sum payment from a life insurance policy could go a long way to helping them pay of any outstanding debts and also maintain their lifestyle.



Taking out a life insurance policy is a simple and popular way to protect your loved ones financially. The length of time you choose to be insured for is called the 'term'. With most companies you can choose a term between one and 40 years for Level Term Assurance, or between five and 40 years for Decreasing Term Assurance, depending on your age when you take the policy out. If you die during the term, your policy will pay out a lump sum of money.

The cost of life insurance cover can vary depending on the type of policy and the level of cover that you choose. Other factors that can increase the cost of life insurance include obesity, certain medical conditions, and smoking, which mean that you are classed as a higher risk customer to the Life Insurance Company.

Once you decide how many years you would like cover for the protection will continue until the date you have chosen as long as you keep paying your premiums.

There are 3 main types of cover Level Term life insurance which provides a fixed cash sum payment if you die during the period of cover, Mortgage life insurance which helps pay off your repayment mortgage if you die during the period of cover. The cash sum is designed to reduce in line with a standard repayment mortgage. Finally life insurance with critical illness that pays out a lump sum if you either die or are diagnosed with a critical illness that meets the policy definitions.

Since life insurance is an important financial safety net, it is essential that you complete the application accurately. If you fail to mention something like a medical condition, for example, the life insurance company may not pay out in the event of a claim.

Of course many people who take out life cover in relation to a loan or mortgage often cancel the cover further down the line due to a variety of reasons. The most common one is tidying up your direct debits and forgetting why you pay that sum every month or maybe at that point justifying the cost.

Only when you are ever in the position to need that that cover do you realise its value, this is especially so when the family left behind not only have to cope with the loss of a loved one but then the loss of the stable family home. Anyone leaving their family in this position would be racked with guilt, except of course you are not here to see it.

Think carefully about the decisions you make, it is often much more expensive to restart your cover with a new policy after you cancelled one that had been in existence for a few years and it is often a false economy. Furthermore the risk of financial deprivation is very real whilst there is no cover in place.