life insurance

By Beccy Stephenson on

Critical Illness Cover

Protecting You and Your Family

Life insurance has been designed to protect your loved ones financially if you pass away, helping to reduce the financial impact that can often come hand-in-hand with the death of a loved one.

Providing peace of mind that your family will not have to bear the financial brunt of your passing, life insurance pays out a cash sum to your loved ones in the event of your death. There are a wide variety of different life insurance policies available, providing different levels of cover to meet your individual circumstances. 

When looking for a life insurance policy, you will need to select how much cover you need and how long you need the policy for. Once you have done this, the insurer will then provide a quote, outlining the monthly or annual premium of your policy.

Not everyone needs life insurance or chooses to take out cover. Whether you feel the need to have a life insurance policy in place comes down to your individual circumstances. For example, if you have a partner, child or other dependants that rely on you financially, life insurance can be incredibly beneficial and put your mind at rest.

If you are yet to make a decision regarding life insurance and you are looking for more information about this type of cover, we have created a helpful guide outlining everything that you need to know about life insurance.

How does life insurance and critical illness cover work?

There are two main types of life insurance: term life insurance and whole of life insurance. But what is the difference? Term life insurance sets a maximum term and pays out a cash sum if you die during that period, if you do not die during the term, there will be no lump sum payable. Alternatively, you can opt for whole-of-life insurance, which will ensure you are covered until you pass away, no matter your age.

With both types of policy, a cash sum will be paid out if you pass away as long as you keep paying your monthly premiums. When choosing a life insurance policy, it’s entirely up to you to decide how long you would like your cover to last for and whether you would like single cover or joint cover. 

Critical illness cover will cover you if you are diagnosed with a terminal or critical illness and pay out a lump sum to assist you at a time when you might not be able to work due to your illness.

Benefits of life and critical illness insurance

Both types of policies offer a host of benefits and are particularly important if you own a property with a partner, or have children or any other dependants that rely on you financially. The benefits include:

  • Helps to protect your loved ones financially 
  • Can help to reduce the financial stress of losing a parent or partner
  • Provides peace of mind that your loved ones will be looked after
  • Can help compensate for a loss of earnings in the event of your death
  • Can be put towards any unpaid debts that will fall to loved ones
  • Can contribute towards funeral costs
  • Can provide you with a lump sum payment when diagnosed with a terminal or critical illness

Who doesn’t need it?

You may not need life insurance if:

  • you’re single
  • your partner earns enough for your family to live on
  • you’re on a low income and could be eligible for state benefits.

If you’re not sure whether you would benefit from life insurance, you should seek professional financial advice.

Do I need life insurance for a mortgage?

Contrary to popular belief, you do not need to take out life insurance in order to get a mortgage. However, one of the main reasons why people take out life insurance is to ensure that their families can carry on paying the mortgage in the event of their death.

If you require any more assistance or you wish to talk through your life insurance options, it’s always worthwhile speaking to the professionals. Here at Mortgage Decisions, we are always on hand to offer the very best life insurance advice. Get in touch to find out more at 03454 500 200.

Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

Beccy Stephenson
Beccy has over 14 years’ experience in the financial services industry, assisting and liaising with clients to ensure that their journey throughout the homebuying process runs smoothly. Helping clients to achieve their financial goals is something that Beccy feels is very rewarding. She also supports her colleagues by sharing her knowledge and enthusiasm for the business.
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