Life insurance can help families and individuals pay off debts or leave lump sums of money behind in the event of death or even a terminal illness (a medical condition where the life insurance provider and medical professionals deem that a person has less than 12 months to live). There are many reasons why people feel the need to take out life insurance and family life insurance.

Level term Insurance means the amount you choose (For Example £100,000) would remain the same until the policy expires. This is more cost-effective and typically used with loans that are fixed liabilities over time, such as an interest-only mortgage and help to buy loans. The larger the amount chosen and the longer the policy will last, the more the premiums will increase. This would be a higher “risk” to the insurer, whereas the lower the premium and the shorter the life insurance policy would be a lower “risk” to the insurance provider, due to the likelihood of it happening.

Decreasing Term Insurance means the amount will start off at a certain amount (For example £100,000) but will reduce yearly, this is more cost-effective and typically used with loans that will depreciate over time, such as a repayment mortgage and some loans. Although some people don’t like the idea of the monetary policy value going down every year, the main idea of the life insurance policy is to pay off the outstanding balance of the loan. An example of how this could be effective is, Mr Smith is in his 60’s and has a budget of £50 per month. The family life insurance policy would only pay out £50,000 in the event of his death, however, the value of his property had grown to over £500,000. Mr Smith felt that the value of the property would be more than enough to pass down to his wife and children. Everyone’s circumstances are different and we are happy to give you advice that best suits your needs.