What is Life Insurance?

Life Insurance pays an income tax-free lump sum if you were to die whilst the policy is in force. Most good life insurance polices also include what is called Terminal Illness cover and at no extra cost. This means that the policy will pay out early if you are diagnosed with an illness from which a Doctor expects you to die within 12 months of diagnosis.

Life Insurance is an extremely useful and affordable form of insurance. You can apply for it at any time as long as you are under the age of 68. (Most insurers will not insure you over the age of 70.) It provides a level of security for your family if the worst was to happen.

If the Life Insurance is unrelated to your mortgage, you need to decide how much you want to insure for and how long you want to be insured for (the term). The premium will be calculated accordingly.

If you are insuring to protect an Interest Only Mortgage the amount of cover you'll need will equal the value of your mortgage. The term of the insurance will also need to match the length of the mortgage.

If you are insuring to protect a Repayment Mortgage you should take out a specialist form of insurance called Mortgage Life Insurance.

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