Life insurance cover
What is life insurance cover?
Life insurance cover is an insurance product offered to customers which is designed to pay their families a large payout if the customer loses their life during the terms of the cover.
Life insurance cover is an essential insurance policy for many, who would leave their families unable to afford their mortgages or simple luxuries in life if they were to die tomorrow. Life insurance will replace your earnings, and is usually taken by customers who take out a mortgage to make sure that mortgage is paid off in full in the event of a customer’s death.
How does life insurance cover work?
Life insurance cover is a relatively simple product and comes in two main different forms. Term life insurance cover and whole life insurance cover work in a different way, but carry the same basic principles which make life insurance an insurance policy many cannot afford to be without.
Life insurance cover sees a customer given a quote which will have a monthly premium that they will pay for the term of the agreement. This is usually the length of a mortgage, so will be for around 25 years.
The customer will pay for this insurance for the length of their insurance, and at the end of that term, the insurance policy will be cancelled. This is if all goes well. If you unfortunately lose your life at anytime during the policy, even just a few months into it, your family will be paid a lump sum payment which they can use to pay off their mortgage, and they can use the remainder of the payment to support themselves while they find a way back on their feet after their loss.
Why would I take out life insurance cover?
When weighing up your need for life insurance cover, the easiest way to assess its worth is to look at your financial responsibilities over the next twenty five years, and ask yourself who would meet those responsibilities if you were to die tomorrow.
In many cases, young children can cost as much as £100,000 to raise from birth to university, and a mortgage can also be hundreds of thousands of pounds. Will your partner you’ve left behind be able to afford to meet these costs, whilst looking after your children? If like the majority of the UK, your answer is no, then life insurance cover is for you.