Life Insurance

Types of life cover

Term life insurance covers you for a fixed period — for example the length of a mortgage — and pays out only if you die within that term. Whole-of-life insurance has no end date and is designed to pay out whenever you die, which makes it more expensive. Within term cover you can choose a level sum that stays the same, or decreasing cover that falls over time to track a repayment mortgage.

• Level term — a fixed payout for a fixed period
• Decreasing term — the payout reduces over time, often used alongside a repayment mortgage
• Whole-of-life — cover with no fixed end date, designed to pay out eventually

How much cover you might need

There is no single right answer. People often think about clearing a mortgage, replacing lost income for a partner or children, and covering funeral or childcare costs. The right amount and term depend on your circumstances, so this is general information rather than personal advice — a regulated adviser can recommend what is suitable for you.

Writing a policy in trust

Putting a life insurance policy into trust means the payout can go directly to your chosen beneficiaries rather than forming part of your estate. This can speed up payment and may help with inheritance tax planning. It is usually free to set up when you take out the policy, but the right approach depends on your situation, so consider professional advice.