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Life Insurance

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Types of life insurance policies

Level Term Assurance – A LTA policy pays out a tax-free lump sum in the event of death at any point during the term of the policy. This is an ideal policy for use with an interest-only mortgage or family’s ongoing living costs. The level of cover remains the same throughout the term of the policy. 

Decreasing Term Assurance – A DTA or mortgage protection policy is a very cost-effective life policy and is normally used in conjunction with a repayment mortgage. The policy is for a specific term, which could be the term of the mortgage. This provides a tax-free lump sum in the event of death and will usually cover the mortgage balance as cover reduces in line with the mortgage balance.

Critical Illness Cover – A CIC policy pays a tax-free lump sum if you were to be diagnosed with a critical illness as defined on the wording of your insurance policy, during the term of your policy. Illnesses include heart attack, stroke, multiple sclerosis, or cancer, which statistically, 50% of adults are being diagnosed with.

Income Protection – An IP or private health insurance policy pays a monthly benefit, normally a proportion of your income, in the event you are unable to work due to an accident, injury, critical illness or even stress. This will pay a monthly benefit either up to retirement or until you are fit enough to return to work. As well as being paid a monthly benefit, where this differs from a CIC policy is that illnesses that are covered are not limited to the ones defined on an insurance policy, they are far more comprehensive than that and may be an appropriate way to protect yourself from the impact of an illness or injury in both the short and long term.

Family Income Benefit – A FIB policy is designed to pay a monthly benefit in the event of death or diagnoses of a critical illness. This is usually set up alongside a mortgage protection policy which clears the mortgage debt whereas the FIB policy would provide a regular monthly income to cover the family’s ongoing household and lifestyle expenses.

Placing Policies in Trust – Life and FIB policies can be placed in trust to mitigate a potential Inheritance Tax liability. By placing a policy in trust, the proceeds will be paid into the trust as opposed to into your estate where, it could push the value of your estate over the IHT threshold, where a 40% IHT liability could be incurred by your beneficiaries. Access to the proceeds of the policy is usually a lot quicker if it is paid into a trust.

Our Insurance Partners

We work with a broad range of life insurance providers to ensure that we find the most competitive deal for you
  • Zurich
    Holloway Friendly
    British Friendly
  • AIG
    The Exeter
    Liverpool Victoria
  • Guardian
    Royal London
    Legal & Genaral
  • Scottish Widows
    Cirencester Friendly
    Holloway Friendly
    British Friendly

Factors that affect the cost of life insurance

As well as the amount of cover you require and the type of life insurance you’d prefer, there are a number of other factors that will impact the overall cost of your insurance. Factors such as your age, any health issues and employment will all play a part. As too will your medical history. Someone who is still relatively young and in good health will pay less for life insurance than someone who is older and has had multiple health problems. We compare a broad range of products from an extensive list of providers to find the most suitable product for you.

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