Life Insurance Guides & Advice

Life insurance pays a benefit if the insured person dies during the policy term, provided the policy conditions are met. It can help repay a mortgage, replace income, provide for dependants or meet other financial needs. Most term policies have no cash-in value and will end without payment if no valid claim is made during the term. Cover must be maintained and premiums paid.

Level term insurance keeps the insured amount broadly unchanged throughout the term, while decreasing term insurance reduces over time, often to broadly follow a repayment mortgage. Level cover may suit a fixed family need or interest-only mortgage, whereas decreasing cover can be lower cost for a reducing debt. The reduction rate may not exactly match the mortgage, particularly if rates or repayments change.

The required amount depends on what the policy is intended to protect. Consider mortgage and other debts, replacement income, childcare, education, funeral costs and the period dependants may need support. Existing savings, workplace benefits and other policies can reduce the shortfall. Cover should be meaningful but affordable throughout the term, and needs should be reviewed as circumstances change.

Often yes, although the insurer may offer standard terms, charge a higher premium, apply an exclusion, postpone or decline depending on the condition and wider risk. Different insurers can assess the same medical history differently. Complete the application accurately and do not cancel existing cover until any replacement policy has been fully underwritten, accepted and placed on risk.

A suitable trust can allow policy proceeds to be paid to chosen beneficiaries without normally waiting for probate and may help keep the benefit outside the estate for inheritance-tax purposes. Trusts are legal arrangements and cannot always be changed easily. The correct trust depends on ownership, beneficiaries and objectives, so consider legal and tax advice where appropriate.

A joint-life policy commonly pays once on the first death and then ends, whereas two single-life policies can potentially pay twice and allow different amounts, terms or beneficiaries. Separate policies may cost more or less depending on circumstances. The right structure depends on the financial need, budget, family arrangements and whether cover should continue for the survivor.

Most policies cover many causes of death, but exclusions and claim conditions apply. A common exclusion concerns suicide during an initial period, and non-disclosure or inaccurate information can affect a claim. Some policies include terminal illness benefit under defined conditions. Read the policy wording and ask for clarification before accepting cover.

Review cover after taking a mortgage, having children, marriage, divorce, a major income change or when an existing policy nears its end. Do not cancel an existing policy simply because a new quote is cheaper; new underwriting, changed health, exclusions and a restarted policy term can make replacement unsuitable. Keep the old cover until the new policy is accepted and active.