Life Insurance

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What is Life Insurance?

Life Insurance is a type of policy that pays out a lump sum in the event you passed away during the policy timeframe. There are different types of policies available, so you can choose the right cover for your family's future.

What Types of Life Insurance Policy Should I Choose?

There are two types, Term Life Insurance and Whole of Life Insurance. With Term Life Insurance, there is Increasing, Level and Decreasing. These can work in-line with the likes of rising inflation and decreasing mortgage debt. With Whole of Life, you are covered until the day you pass away.

Frequently Asked Questions

Do I Need Life Insurance? No, not everybody needs a Life Insurance policy, it's most commonly used by those who have a mortgage and those with children but anyone can take out a policy.

How Does Life Insurance Work? This policy works by paying a one-off lump sum to your dependents if you were to pass away during the term of the policy. The amount that is paid out will differ depending on the level of cover.

How Much Do I Need? This is totally dependent on your circumstances, a good policy will, for example, ensure the remaining mortgage is paid off. It's something our Brokers will discuss and tailor to you and your family.

How Much Does it Cost? Life Insurance policies can start from £6.00 per month, that's cheaper than some Subway meal deals! It's an affordable cost for what it guarantees if the worst was to happen in the future.

Is it the Same as CIC? No, Critical Illness Cover pays out a tax-free lump sum in the event you are diagnosed with a critical illness. Although it's different, you can add this as additional cover to your Life Insurance policy.

Types of Life Insurance

Increasing Term Life Insurance

With Increasing Term Life Insurance policies, the payout is guaranteed to increase each year for the duration of your policy and does so depending on what type of cover you choose: Traditional of Index-Linked.

Traditional ensures that payout will increase each year based on a fixed amount set by the policy Lender, whereas Index-Linked increases their payout based on the rate of inflation. This means that your premiums will increase each year. The benefit of this policy is that as the cost of living increases, you can ensure that your family's lifestyle is protected and that the payout is sufficient for the level of inflation at the time.

Level Life Term Insurance

Level Life Insurance is a type of policy in which premiums are fixed throughout the policy, allowing you to know the exact payout and the term is set for a specific period of time.

With this policy paying out a specific lump sum on the death of a holder, it allows families to pay off loans including a mortgage, so most frequently, the length of the term tends to coincide with the end of a mortgage. If you do not pass away during the term, then you will not receive a payout. However, because of this, premiums tend to be lower than other policies.

Decreasing Term Life Insurance

Decreasing Life Insurance, sometimes known as Mortgage Protection Insurance, works by having both premiums and payout decrease year on year, meaning a lower payout on your death is guaranteed. It is popular because it tends to be more affordable than other types of Life Insurance and is designed to work in line with your biggest financial commitment - your mortgage.

As you pay your mortgage off month by month, the remaining sum owed would be lower than when you first took out the policy. You may see no need to pay in higher premiums for a payout that is much larger than what is owed on your mortgage, in this particular case, Decreasing Life Insurance would be beneficial.

Whole of Life Assurance

Most Life Insurance policies are set for a specific period of time, meaning that if you happened to pass away the day after your policy finished, your family would not receive any payout at all.

With Whole of Life Insurance, you are covered from the day your policy starts to the day you die, although that also means that you will be paying monthly premiums each month too. This type of policy is popular with those who have a family facing inheritance tax or perhaps have other financial commitments such as a business. This type of cover offers extra peace of mind knowing that your family will benefit from the money that you have invested in the plan.

Please note for these insurance products terms and conditions apply. This information is a summary only. You will receive a full policy document upon application. This policy will set out the terms, conditions and limitations of cover provided under the plan.

Home Legal Services Liverpool LLP t/a Right Click Finance is an appointed representative of Primis Mortgage Network. Primis Mortgage Network is a trading name of First Complete Ltd which is authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate some forms of Buy to Let Mortgage.

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The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers based in the UK.

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