What is Life Insurance?
A Royal London Explainer Video
We’ve all heard that life insurance is important, but what is life insurance and how does it work?
This video can help to explain how life insurance works and why you might need it. It also explains the three main types of life insurance which you can buy directly from Royal London.
The first type explained is level life insurance. Level cover pays out a fixed amount when you die, regardless of inflation or how close the policy is to its end. If you are still alive when it ends, your cover will end, too.
The second type explained is decreasing life insurance. It tends to be taken out with a mortgage. But with decreasing cover the amount paid out reduces as the policy goes on, so it can be used to help clear a debt that is itself diminishing – such as a repayment mortgage.
The third type is family income benefit. Family income benefit pays out a regular tax-free income to your dependents if you die. This is designed to help replace some missing earnings, from death up to the end of the policy. Which life insurance to choose depends on who you are and your circumstances. Watch the video to find out more.
If you want to know more about life insurance types and why life insurance is important, you might like to visit our content hub for further explainer articles about the subject.