Life insurance in the UK is designed to provide financial protection for your loved ones in the event of your death. There are different types of life insurance policies available, each with varying levels of coverage and benefits.
Types of Life Insurance in the UK
- Term Life Insurance – Covers you for a set period (e.g., 10, 20, or 30 years). Pays out if you die during the term.
- Level Term – Pays a fixed lump sum.
- Decreasing Term – The payout decreases over time (often used for mortgage protection).
- Increasing Term – The payout increases over time to keep up with inflation.
- Whole Life Insurance – Covers you for your entire life and guarantees a payout when you pass away.
- Over 50s Life Insurance – Guaranteed acceptance for UK residents aged 50-80. Typically used to cover funeral costs.
- Family Income Benefit – Instead of a lump sum, it provides regular payments to your family if you pass away.
- Critical Illness Cover (Optional Add-On) – Pays out if you are diagnosed with a serious illness like cancer, stroke, or heart disease.
Factors Affecting Cost
- Age – Older applicants pay higher premiums.
- Health & Lifestyle – Smoking, medical conditions, and risky occupations increase costs.
- Coverage Amount & Policy Term – Higher payouts or longer terms mean higher premiums.
Popular Life Insurance Providers in the UK
Some well-known insurers include:
- Aviva
- Legal & General
- Royal London
- LV=
- AIG Life
How to Choose a Policy?
- Consider your financial commitments (mortgage, debts, dependents).
- Compare quotes from different providers.
- Decide if you need add-ons like critical illness cover.
