Home/Personal protection/Life Insurance
Personal protectionA lump sum for the people you leave behind.
Life insurance pays out if you die during the term of the policy. For most people it is set up to clear the mortgage, so nobody is forced to sell the house at the worst possible moment.
The two shapes it comes in
Almost every mortgage-related life policy is one of these two. Which one suits you depends on what the money is actually for.
- What it pays
- A single lump sum
- When
- On death during the policy term
- Usual term
- Set to match the mortgage
- Trust
- Normally written in trust, at no cost
Level term
The amount stays the same for the whole term. Right where the money is for the family's living costs, or where you have an interest-only mortgage that is not reducing.
Decreasing term
The cover reduces roughly in line with a repayment mortgage. Cheaper than level cover, and the usual choice where the only job is clearing the loan.
Single or joint
A joint policy pays out once, on the first death, and then ends. Two single policies cost a little more but pay out twice and are easier to separate later.
How we arrange it
Work out what the money is for
Clearing the mortgage is the obvious part. Replacing an income, covering childcare or funeral costs are the parts people forget.
Check what you already have
Death in service through work is common and often overlooked. If you have enough, we will tell you so.
Set the term and the amount
Usually the length of the mortgage, or until the youngest child is independent, whichever runs longer.
Apply, and put it in trust
Underwriting means health and lifestyle questions, sometimes a GP report. Writing it in trust normally keeps the payout out of your estate and gets it paid faster.
Life Insurance, answered
- How much cover do I need? Enough to clear the mortgage is the starting point, not the finish. Think about what your household would need to keep running without your income.
- Level or decreasing? Decreasing is cheaper and follows a repayment mortgage down. Level keeps its value, which matters if the money is for your family's living costs rather than the loan.
- I have death in service at work. Is that enough? Sometimes. It is usually a multiple of salary, it stops the day you leave, and it is rarely written to cover the mortgage. We will look at it before recommending anything.
- Does smoking affect the price? Considerably. Most insurers ask about the last twelve months, and vaping counts with many of them.
- What is writing it in trust? A short legal form that puts the policy outside your estate. It normally means faster payment to the people you name and no inheritance tax on the proceeds. It usually costs nothing to set up.
How we set up most policies. It usually costs nothing and gets the money to your family faster.
We will also tell you where the cover you already have through work is enough, and where it quietly is not.
Request assistancePeople asking about this usually ask about these
Ask us about life insurance
Tell us where you are up to and an adviser will come back to you. The answers below just save us a phone call working it out.
- One of the five advisers on Eastfield Road, not a call centre.
- Usually the same working day.
- No obligation, and nothing to sign at the end of it.
Would rather talk now? Call 01733 602 033.
Twenty minutes, no pressure.
We will tell you what you actually need rather than what is easiest to sell.