Life explained

By taking out Life insurance, you can rest easy that those you care most about will be safe and secure, should the worst happen to you.

A life insurance policy provides some financial stability in the event of your death, and ensures that your family and loved ones will not have to suffer hardship if they are unable to maintain an income.

Of course, if you don't have a partner, spouse or civil partner, children, or other dependents, you may not require life cover.

Term insurance (also called term assurance) pays out only if you die within a certain term. Whole-of-life insurance pays out whenever you die. If you want these investments, take some time to consider the full range of products (not just life insurance) which might meet your circumstances.

There are lots of elements to consider when choosing a life insurance policy, so please do consider each one carefully before making a decision. For example, if you are getting term insurance, you might need family income benefit (a policy which pays out income rather than a lump sum), increasing policy (where cover and premium rise over the years), decreasing policy (where cover and premium fall over the years), or renewable policies (which let you extend the original term).

Check for exclusions too - in other words, for excluding factors that mean the policy won't pay out. For example, most do not cover death due to alcohol or drug abuse. You might not be covered while taking part in risky sports. If your health is poor when the policy starts, some causes of death might be excluded or you might be refused cover altogether. Premiums shown are usually fixed for the whole term. There are also contracts where premiums are reviewable after a certain period, usually five years. How flexible is the contract? Can you reduce or increase cover easily as your circumstances change? Are there extra charges for doing this? Does cover stop immediately if you miss a payment or is there a period of grace?
And so on.