21 October 2019

Life insurance cover: what kind do I need?

5 min read



Of course, there is no best insurance, only what’s best for you. Whether you are looking for whole-of-life insurance, need insurance that covers you without a medical examination, or are looking to protect your mortgage, there’s a wide variety of policies to choose from.

What is life insurance and who is it for?

Life insurance financially protects your loved ones in the event of your death. It gives peace of mind in that if you are no longer around, your family will benefit from an amount of money or a regular monthly income until the plan ends, and have financial security.

It’s important for people with children, dependant relatives, a partner or family looking for financial security. It can help pay bills and the mortgage if you were to die and can provide financial help at a time when your family might need it most.

Life insurance is also worth considering for a partner who works part-time or is a homemaker, since paying someone for childcare and housework duties would involve considerable extra costs.

Having life insurance in place could help towards:

  • paying off some or all of the mortgage
  • providing an amount of money to cover household bills
  • making up an income shortfall 

Types of life insurance

Level insurance – the amount of cover stays the same over the length of the term.

Decreasing insurance – sometimes known as mortgage life insurance, decreasing insurance means the payout amount falls each year. It’s generally used to help pay off a repayment mortgage as you can set the cover amount and the term of the policy to match the loan amount and length of your mortgage.

Increasing insurance – the payout amount goes up in time as does your monthly payment. Many choose it to protect the value of the payout against inflation, the rising cost of living.

Family income benefit – this pays out a regular amount of money to your loved ones if you were to suddenly pass away, until the end of the policy. Being a regular payment it can be used as an income to help pay bills and maintain your family’s lifestyle.

Whole-of-life insurance – this guarantees to pay out an amount of money when you die, rather than cover you just for a fixed timeframe. Some people take out whole-of-life insurance to help pay inheritance tax.

Over 50 life insurance – this is whole-of-life insurance for people aged over 50. It pays out an amount of money that can be left as a gift or to help pay for your funeral.

What is critical illness insurance or serious illness benefit?

Both of these cover different illnesses defined by the policy. While they’re different, they’re both designed to help support you and your family financially while you deal with your condition. With either insurance in place, you can focus on getting better, without worrying about how the bills will be paid.

Can I get life insurance after I’m 50?

Yes, although it can be more difficult and costly to arrange life insurance once you are older. The amount you pay each month tends to increase the older you are. However, over 50 life insurance is typically available for people aged from 50 to 85.

Taking steps to protect your family now will give you peace of mind. When you are considering life insurance it’s important to think about why you might need it, how long you would like the insurance to last, and what type of life insurance suits you best.

Life insurance from Royal London