All you need to know
What is life insurance?
Why is life insurance so important?
Life insurance guarantees your loved one financial security in the event of your death, accident or illness. In those unforeseen circumstances, money from an insurer is often the only financial support that the ones you care about can use. In exchange for this security, you will need to commit to paying regular insurance premiums to the insurance company. The amount of contributions and how often they are paid is determined individually and is dependent upon the insurance offer.
The insurance policy does not have to be limited to ourselves. We can include a family member, partner or several people within the policy, at the same time. Life insurance can, therefore, be divided into three main categories family insurance, group insurance and individual insurance.
Basic information How does life insurance work?
Find out more on basic life insurance policies and how they work.
Life insurance is a complex product and can take many different forms. The basic offer of a life insurance policy assures that if you are seriously injured or die during the course of the policy, the beneficiary will receive a lump sum. The value of the lump sum and who will receive it, is discussed on an individual basis, with the insurer. The person who receives the insurance pay-out, however, does not have to be a member of your family. It can be a friend, partner or any other person of your choice. Just make sure you inform the insurer who you are choosing to be your beneficiary.
It is also worth noting that the beneficiary will only be paid if the terms of the contract are met. The insurer will not transfer the sum if the insurance event occurs during the grace period, i.e. the period excluded from insurance coverage, or if the incident occurs after the term of the contract.
Expert Advice: Finding yourself in a difficult financial situation and no longer able to pay off your premiums? Consult the Government page to check what how can you manage your debt.
A typical insurance plan does offer the option of extending the package with additional elements, such as extra cover or saving option. The different life insurance plans available include; the indefinite period policy, the term policy and the endowment policy.
What is the difference between term policy, whole of life policy and endowment policy? Read More »
Short Guide Life insurance with Life Insurance Compare
The process of attaining insurance through us, has been developed specifically with the comfort of our clients in mind. You can take out cover without ever needing to leave your home. Here’s how it works in 3 quick steps:
Step 1 – Check what we offer
Do you know what type of life insurance you’re looking for yet? If not, familiarise yourself with the different plans that we offer. Review the insurance schemes available on our website and think about which variant best meets your expectations. Each insurance plan involves a different scope of protection and imposes differing conditions, so check which of the available solutions has what you are looking for.
Caution: Late payment of monthly premiums may lead to automatic exclusion from the insurance policy!
Step 2 – Fill in a questionnaire
Our short online form takes only 2 minutes to fill out. The application will help us understand what type of cover you’re looking for and will help us narrow down the list of quotes to the one suiting your needs best. The application will ask you about your age, sex, the cover amount that interests you and how long you wish to be insured for.
Top tip: Be honest in your questionnaire. If you’re being asked about your current medical condition or medical history – don’t lie. If an insurer discovers after your death that you concealed the truth, your policy will be invalidated and the insurance provider won’t pay out.
Step 3 – Join Life Insurance
After you submit your application we will analyse and compare the quotes of top UK insurers. Once we’re done, we will match you with an insurer that has the best insurance for you. Check the terms of the insurance and see if it meets your needs. Once you’re happy, accept!
Expert Advice How to select the right life insurance?
Choosing the right life insurance is a responsible decision that needs to be made with care and consideration. Here are some tips that will make it easier to decide which life insurance plan you should choose.
1. Do you need life insurance?
This is the most basic question you should ask yourself. Think about your current life circumstances and look at the list below. If any of the points correspond with your current life situation, it is worth considering taking out insurance.
- Your spouse depends on you financially
- You have children who are dependent on you financially
- You have a mortgage or you have debts
- You are retired and want to be sure that your family will have sufficient funds to cover the costs of funeral arrangements etc.
- You want to make sure that your family is able to maintain their current lifestyle when you’re no longer able to provide for them.
Why Choose Us: In the event of your passing, a beneficiary will have access to insurance money within 24 hours, without having to wait for the resolution of inheritance proceedings. What's more, the amount received is not subject to inheritance and donation tax. This is especially important information for people in partnership.
2. What period of protection do you need?
The insurance period you choose will be down to personal preference. Here's what you should consider when choosing the duration of your life insurance policy:
- Do you have a mortgage? If so, how much is still outstanding? It is a good idea to adjust the duration of the policy to cover the time you have left to repay the debt. Doing this will mean that your relatives will be able to use the insurance sum to repay any outstanding mortgage debt should you no longer be around.
- Do you have school-age children? Consider extending the duration of your insurance until your children reach adulthood and will no longer be financially dependent on you.
- Are you 65 or more? In this case, it is worth considering taking an indefinite policy that will provide your loved ones immediate financial support when you are no longer around.
3. What cover amount should you chose?
The amount of life insurance you take out should be adjusted to the total amount of expenses that your loved ones will need to cover when you’re gone. If you are the main breadwinner, leave your loved ones with an amount that, after your death, will give them time to get back on their feet financially. Consider living expense and the monthly repayment of the loan instalment. Do not forget to include unforeseen expenses resulting from your death, such as burial costs.
Top tip: Remember that you can include your spouse or a family member within your policy. That way the insurance covers both of you.
4. Which type of insurance is right for you?
Life insurance is a complex product, available in various forms and under different conditions. When looking for the right life insurance policy, consider the circumstances you want to protect yourself against and the type of support you expect from your insurance company. Insurance companies provide different plans for different circumstances. Health insurance or hospital insurance will cover the hospitalization or costs of medical treatment. Accident insurance will help you out in case you’ve been in an accident and you’re no longer capable of working and providing for your family.
Why Choose Us: We only work with insurers which provide affordable and quality products. Therefore, we have suitable offers for everyone. No matter how big or small your earnings.
Insurance also differs in terms of support offered by insurance companies. It can be anything from financial support, through to the help of a psychologist, to co-financing medication. Think about what protection you care about the most.
Expert Advice: When checking the policy offer, pay attention to exclusion from liability. Check the grace period and find out in which cases the insurer will not be able to pay benefits. Thanks to this you will know exactly what the scope of your protection is and what it covers. After you submit your application we will analyse and compare the quotes of top UK insurers. Once we’re done, we will match you with an insurer that has the best insurance for you. Check the terms of the insurance and see if it meets your needs. Once you’re happy, accept!
Make a decision Life insurance, term life insurance or medical insurance?
Check the description of each option and see which one is the best for you.
How does it compare at a glance?
|Type of insurance||Term insurance||Whole of life insurance||Medical insurance|
|What does the cover include?||Lump sum||Lump sum + more, if combined with a saving option||Medical treatment and medical procedures|
|Who is it recommended for?||18-60||50+||18-60|
|Type of premiums||Fixed, decreasing, increasing||Fixed||Fixed|
|What’s the term of the life insurance?||5-25 years||Whole of life||5-20|
Term insurance is a type of life insurance policy that provides coverage for a certain number of years. Most of the plans run from 5 to 25 years, but it’s ultimately up to you how long you want to take out the insurance for. If you die during the term, the insurer will pay the designated beneficiaries the lump sum. The lump sum WILL NOT be paid out if the death occurs outside of the term of the policy.
Term life insurance can be divided into 3 different categories:
Decreasing life insurance
With this life insurance option, the cover and premiums shrink during the policy term. This is a good option for people taking the insurance to cover a reducing mortgage. It is also cheaper than a level term assurance.
Increasing life insurance Contrary to decreasing life insurance, premiums and cover increase the longer the policy is. This type of term insurance is good for anyone who wants to keep his cover in line with inflation or to cover an increasing debt.
Level life insurance In this option your cover and the premiums stay the same and do not change with time.
Is term life insurance option for you?
- Yes, if you have outstanding debts or mortgage to pay off.
- Yes, if you have children in school age, that would need financial support until they’re adults.
- Yes, if your partner depends upon you financially.
Experts Advice: Would you like to know more about Term insurance? Go to Money Advice Service to find out more.
Whole of life insurance
Whole of life insurance (as the name suggests) runs for the entire duration of your lifetime. You pay the premiums to the insurer for a fixed period, or each month, until you die. When you do pass away, your loved ones are paid a lump sum when you’re gone. This type of life insurance is designed for people over 50 and you can join even if you’re over 70.
Since permanent insurance is dedicated to people of a certain age, some insurers might require you to undergo a medical check before you can take out insurance.
Top tip: Remember that you can include your spouse or a family member within your policy. That way the insurance covers both of you.
The cash value of whole of life insurance does offer a measure of security as, if you ever decide to resign from your coverage, you would get the cash value back. During the first couple of years, surrender charges apply, which means you wouldn’t get the entire accumulated cash value. However, you’d still be able to recoup a proportion of the money you’ve paid.
When should you consider whole of life insurance?
- If you still need life insurance but you are no longer eligible for term insurance.
- If you want to leave behind a sum big enough to cover the inheritance tax that might fall on your children should you die.
- You want to leave your loved ones an amount to cover any unexpected expenses related to your death.
Another popular type of insurance is health or medical insurance. This policy offers coverage of medical expenses plus, quicker diagnosis and access to better hospital facilities. Another, and probably the biggest benefit of medial insurance is that it gives you access to specialist medical treatment. The medical insurance, therefore, provides you with all the support you need on each step of a medical treatment starting from a consultation and finishing at aftercare.
How does it work? Medical insurance options vary from provider to provide, that’s why it’s important to shop around before you chose one. Some come with packages against particular medical conditions such as cancer. This type of insurance would cover the costs of radiotherapy, chemotherapy and give you access to a professional oncologist.
The basic health insurance package will cover the costs of various medical treatments, scans and surgical procedures. However, there is a variety of medical insurance and health insurance products available on the market, so if you feel that the basic package is insufficient you will be able to find something closer to your needs.
Who is this insurance good for?
- If there are certain medical conditions running in your family and there’s an increased chance they might affect you
- If you want to make sure that should you get ill, you will have the access to the best medical treatment
To sum up
There are many types of life insurance on the market and the choice can sometimes be overwhelming. The key to finding an appropriate life insurance plan lays in thorough preparation. Ask yourself, what cover do you require and how long do you need it for? Those questions will help you establish which type of policy is suitable for you and which one you should pick. Once you know that, let us do the rest! We can help you find the best insurance provider.
Top tips How to secure the best life insurance deal?
The insurance market is heaving with a variety of quotes at different prices. How to make sure we’re securing the best deal? Here are few tips that will help you in choosing the best offer?
1. Shop around
Don’t go with the first insurer you see on the internet! There are plenty of insurance offers on the market, so give yourself time to shop around to find the offer that works best for you. Check whether the offered coverage and support is the one you need and if you can afford the monthly premiums.
Caution: Did you know that in the UK all insurance providers need to be registered with the Financial Conduct Authority (FCA)? Before proceeding with a provider ensure that they’re registered. To do this, visit the FCA’s site and check the provider appears on their online register.
2. Opt for a plan that covers your mortgage
If you’re still not sure what should be the amount of your cover and how long to chose it for, opt for the one matching your mortgage. Dealing with a death of a loved one is hard enough to imagine, but combine that with stress related to replaying a mortgage? Providing your loved ones with financial stability and ensuring paying off your debt is not the thing they should worry about, will take a lot of weight off their shoulders.
Top tip: If you’re getting a term cover to match your mortgage, decreasing life insurance would be the best option. The value of the cover and premiums decreases with your debt so you’ll have less to pay off each month.
3. Be honest about your health
Some of the life insurers will ask you to fill in a medical questionnaire or even go to a medical check-up before they let you take out insurance. Be honest in your application and do not try to hide any illnesses. The last thing you want is for an insurer to reject your beneficiaries claim, just because you weren’t honest in your application. The best idea would be to find an insurer who doesn’t require medical check-ups before joining.
Expert advice: Smokers pay more for life insurance than non-smokers. If you haven’t already considered kicking the habit, think of how much more you’ll have to spend on the insurance. If you want to get a better insurance deal, quit smoking now. Go to NHS page to find out how to quit smoking effectively.
4. Join life insurance early
The older you are the more you’ll have to pay for your life insurance. If you want to get cheap fixed premiums consider taking out insurance as soon as possible. It’s a better idea to do it when you’re younger and of a good health. This is when your chances of getting the best deal are the highest. However, please remember it’s still possible to find a good deal even when you’re over 50. With the multitude of insurance quotes on the market it’s easy to find something suitable for everyone.
Why Choose Us: We work with an extensive panel of lenders to provide you with the best deals they currently are on the market. With us you will find the best insurance quote within minutes. All that with no fees and no hassle!
5. Check for the grace period and exclusions
It’s good to know what your life insurance covers, but it’s even more useful to understand what it doesn’t cover. Each life insurance plan has its grace period and exclusions. Check what they are before committing to an insurance scheme, to avoid bad surprises. Some insurance providers won’t pay out money if you fall terminally ill or commit suicide in the first 2 years of the policy, which means should you pass away in that time, your family will not have access to the full lump sum. That’s why it’s always a good idea to find out what the small print says before signing the contract.
Expert advice: The most typical exclusions include: death in war or as a participant of a rebellion, taking part in illegal activities or dying as a result of drug or alcohol overdose, suicide or self-inflicted injuries.
6. Consider joint-policy
If you’re still looking for a way to reduce the costs of life insurance, consider taking out a joint-policy. You can take out a joint your policy with any family member - it can be your spouse, father or ever mother-in-law. You chose who you wish to include in your life policy. This option is much cheaper than paying for two separate life insurance policies. However, should you and the person you’re sharing your life insurance with die at the same time, the insurer will only pay out for one death, so be mindful of this.
Top tip: It’s worth familiarizing oneself with the most probable causes of death for people your age. It’s not nice to think or read about it but checking the statics will help you narrow down the potential threats and make it easier to pick an appropriate cover. Check this page to find the health statistics for 2018.
All questions answered Most frequently asked questions about life insurance
If you still have questions about life insurance and how it works – this is the section for you. Check what the most frequently asked questions about life insurance are and see what the expert’s answers are.
Do I need life insurance?
If you’re single, have no mortgage or debts and your partner is financially independent then most likely not. However, if you are the sole bread-winner of your family, have debts or dependants that would struggle without your financial support, life insurance is highly advisable.
How much cover do I need?
When considering the amount of your cover take into account both your income and outgoings. Think about your monthly spends – do they include childcare cost? Mortgage? Debt repayment? An odd holiday? Add all possible costs together and make sure the lump sum will be able to cover the total adequately.
How long do I need cover for?
The duration of a life insurance plan will depend on your individual situation. It is generally advisable to adjust the time of the insurance policy to ensure that it will cover your mortgage repayments. Also, if you have children, extend the insurance period to a time when they are likely to be financially independent.
What will happen if I don’t pay premiums on time?
If you fail to pay your premiums on time the insurer might exclude you from the insurance policy. If that happens, the insurance will not pay out if anything happens to you and your family will be left with no financial support. Should you find yourself facing debts and unable to handle your financial situation, go to Citizens Advice to find out what can you do to improve your situation.
Can I get life insurance if I’m unemployed?
Yes, you can still get a life insurance without any restrictions. If you were applying for a particularly high amount of cover, the insurer might ask to justify the amount, but that’s something that would normally happen, regardless of whether you’re employed or not.
When does the policy start?
It usually takes about 30 days, from your application being accepted, for the policy to come into effect. If, for any reason, the insurer requires more information about your health and they need to consult with your GP, finalising the agreement may be slightly delayed. It takes at least two weeks for a GP to process such a request from an insurer. Do not worry, you will not be charged for the delay.
Can I change the terms of my policy after it has started?
Usually, insurers do not permit the making of any changes to the plan, once it has already started. Some will let you increase the value of the lump sum if your circumstances have changed, i.e., you’ve just had a baby or moved into a new house. It’s worth asking your insurer about the possibility of making changes to your policy before you finalise an agreement.
How do I cancel life insurance?
If, for some reason you want to resign from your current life insurance plan, simply write to your insurance provider and inform them about your wishes. You can generally resign from your life insurance within the first 30 days at no charge. If you cancel during this time, you should be able to recover the premiums already paid to the insurer. However, cancelling outside of the designated probation period will mean that you cannot recover any premiums which have already been paid.