What Does Life Insurance Cover You For?

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Sometimes, the simplest questions are the ones most overlooked. It is often assumed that everyone knows what life insurance is, but at Quick Quote Protect, we know that’s not the case.

Plenty of people don’t really know what it’s all about and until it comes up at some point in your life, such as when you get a mortgage or have children, life cover doesn’t really tend to come up in conversation.

What is life cover?

Life insurance, or life assurance, is a contract between you and an insurance company stating that if you die at any point during the policy term, your family (or anyone else you nominate as beneficiaries) get a lump sum of money to help them deal with the financial loss after you’re no longer in their lives.

It is typically used to make sure things like the mortgage, funeral costs and any other expenses are paid for when the policyholder (i.e. you) dies.

How does life insurance work?

Like most types of insurance, life insurance involves you paying regular payments (called the ‘premium’) to the insurance company, and them paying out the sum assured (the value of the agreed cover) should you die.

With life insurance, there’s no obligation and you can stop your payments at any time – but if you do, then the cover is also immediately stopped, and the insurance contract is terminated. So, you are free to leave the deal, but you will no longer be covered – plus, you can’t ask for them to pay back any premiums that you’ve already paid.

What are the types of life insurance?

In brief, there are four main types of life insurance:

• Whole of life insurance – the simplest cover that lasts until you pass away, often used to cover funeral expenses.
• Over 50s life insurance – similar to whole of life cover that’s tailored specifically for those over the age of 50 with guaranteed acceptance, no matter your medical history.
• Level term life insurance – often larger-scale life insurance designed to cover you during your working life.
• Decreasing term life insurance – cheaper cover that’s usually tied to a mortgage. It ends once your house is all paid for.

What is not covered by life insurance?

There are some side products to life insurance, such as critical illness cover, which covers you if you become seriously ill or unable to work, but the main life insurance policy only covers your death. There’s no chance of receiving a payment without that tragedy occurring.

Life insurance is also personal – you can get joint life insurance quotes but typically, a life insurance policy covers a single person.

Children do not require life insurance, as they don’t bring money into the household, so there’s no need for financial cover and the money you would spend on premiums is put to far better use in a savings account. The best life insurance companies all agree that children’s cover is an unnecessary expense for most families.

If you’re looking into getting critical illness cover, however, your child would be covered if they became critically ill or injured, but not if they were to pass away. Read our guide on Critical Illness Cover for Children to find out more.

How much life insurance do I need?

If you are a parent with a family of young children and a mortgage, your life insurance requirements are going to be very different to a retired couple with grown-up heirs. For the former, we would advise both level-term and decreasing term policies with integrated critical illness cover and a total sum assured (lump sum) of more than ten times their salary. For the latter, a whole of life policy or over 50s policy for covering funeral costs is far more likely to be appropriate.

To find out what policy is best for you, give us a call at Quick Quote Protect! Our friendly and experienced advisors can answer all your related questions and find you the best life insurance policy to suit.

So, for cheap life insurance, fill in our contact form or pick up the phone today,  obligation-free!