What do I need life insurance for?

Aside from not being the most cheerful or glamorous thing to read up on, life insurance is a complex beast, packed with more complicated language than the Klingon dictionary.

Do you have children? Got a mortgage? Then you might need life insurance.

But where do you start? Do I even need life insurance and if so what type do I need and how long do I need it for? How do I compare life insurance quotes? Is cheap life insurance a waste of money? How do you compare life insurance policies from different providers? Fret not, however, for we’ve put together and answered a few of the more common questions and concerns here.


What do I need life insurance for?

The cover from your life insurance will offer financial protection for your family if you die during the term of the policy having continued to pay your premiums. For example, if you’ve borrowed money to buy your home, a life insurance pay-out could help your family pay off the mortgage if you die. Or, if you’ve got children or dependant relatives, it could help provide for them financially when they no longer have your income to support them. Different policies from different providers can also be used to cover things like funeral costs or as part of inheritance planning – in the latter case you should always seek independent financial advice as this is a complex matter.  Most life insurance policies will also pay out if you are diagnosed with a terminal illness, which potentially gives you more control as to how to provide for your family while you are still able to make those decisions.


Sounds good, but I don’t want to rack up my monthly outgoings. Is cheap life insurance ok?

You get what you pay for. The cost of your insurance premium depends on lots of variables, including:

  • Your age
  • Your general health
  • Your lifestyle
  • Whether you are a smoker or have smoked
  • Your family medical history

High-risk jobs and hobbies like rock climbing or competitive spear fishing may also impact how much you pay. So, all other things being equal, a call centre worker who relaxes by embroidering will pay less than a professional lion tamer with a penchant for cage fighting.  

In general, the more protection your life insurance policy offers, the higher your premiums. While you don’t want to cut corners when it comes to something as important as life insurance, there are things you can do to keep the cost down. Choosing the right life insurance policy means you’re only paying for what you need. As an example, to help you reduce the amount you pay and improve your health and wellbeing, some life insurance providers will offer discounts to your premiums if you improve your lifestyle.

The most common types of life insurance are ‘Whole of life insurance’ and ‘Term insurance’.

Whole of life insurance covers you for the whole of your life and provides protection until you die, whenever that is. It guarantees a lump sum payment on death provided premiums have been paid throughout the policy. Premiums are more expensive because a claim is inevitable. However, if you just want to cover the cost of your mortgage, you could get a term insurance policy to cover the time (or “term”) of your mortgage. You can also choose to have the amount of cover reduce in line with your outstanding mortgage amount and this will reduce the price of the cover – this is known as decreasing term assurance. Choosing to do without some of the optional extras, such as a critical illness add on to the life insurance policy can also help keep the cost down.


So many options! Which life insurance may be best for me?

If you’ve decided you want cover, now you just need to decide how to choose life insurance that’s right for you. 

What kind of cover do you want? Enough to pay off your outstanding mortgage? That’s a straight-forward one, because you know the amount you need cover and for how long you’ll need it. Most providers will have a calculator on their website to help you work out the cost.

If you want to provide your family with a regular income or a lump sum if you die, look at your monthly outgoings and think about possible future costs to work out how much cover you may need.

However, if you’re over 50 and looking to protect an inheritance from tax, or help your family cover funeral costs, the cover may depend more on what you can afford to pay in premiums. 

Choose carefully. You can compare life insurance quotes using all the usual comparison websites. But it‘s usually best to visit life insurance providers’ websites individually to compare life insurance policies before you make a final decision because some of these providers will not be available through comparison sites.  Many insurers do not offer advice or make personal recommendations but will give some good tips on what to consider when you want to choose the best life insurance policy for you. You may also need to think about potential inheritance tax liability on your estate and whether you wish to put the policy in trust.


Okay, I’ve done some research, but now I want to talk to a human. Where can I get life insurance advice?

We’re passionate about what reviti life insurance can do for you. We want to provide you with lots of helpful information, but please bear in mind we don’t give financial advice…

But we know someone that does. Check out www.unbiased.co.uk to find an independent financial advisor near you.