Are you looking to take out life insurance for yourself and/or a loved one, but not sure which insurance policy is best and whether it will fit your requirements? At The Levels Financials, our team of dedicated insurance advisors are on hand to provide transparent and comprehensive life insurance advice, to ensure you get the most out of your policy.
In this article, we’ll provide you with essential information to help you navigate the world of life insurance and make informed decisions based on your circumstances. Life insurance is crucial for financial protection and it ensures you or your loved ones are taken care of and can cover essential costs. So, let us guide you through the process and provide you with the best life insurance advice and tips.
This article will cover the following topics:
- What is life insurance & how does it work?
- Life insurance – key details you need to know
- Life insurance UK statistics
- The benefits of taking out life insurance
- Understanding the different types of life insurance
- Things to think about when taking out life insurance
- How The Levels Financial can help advise on your life insurance policy
What Is Life Insurance & How Does It Work?
Life insurance is a form of financial protection in the event of unexpected passing. Life insurance cover will pay out a lump sum if the policyholder was to pass away during the policy term. Life insurance can also pay out a lump sum if the policyholder was diagnosed with a terminal illness and is not expected to live longer than 12 months.
Providing your loved ones with financial aid after you’re gone. Life insurance policies provide a payout to your beneficiaries upon your death, which can help cover essential costs such as rent or mortgage payments, household bills, or childcare. However, the recipient can choose how to spend the payments, either to pay off a mortgage or bills or to maintain their standard of living.
How Does Life Insurance Work?
Once you’ve chosen your coverage and started your payments, if the policyholder passes away, the named benefactors on the policy, next of kin, marital partner, loved ones or even organisations, will then receive a payment from the insurance company.
Payments will only be submitted once the insurance provider has been notified of the death of the policyholder and appropriate checks have been completed.
It’s also important to review your life insurance policy regularly to ensure it still meets your needs. Major life events, such as getting married, having children, or purchasing a home, may require adjustments to your coverage.
Life Insurance – Key Details You Need To Know
At The Levels Financial, we know that life insurance can be one of the biggest insurance policies that you could invest in. This is why it is important to seek out life insurance advice and explore different policies to find the best fit for your needs.
The Levels Financial offers a range of life insurance policies in Somerset & the South West, allowing you to choose the coverage that suits you best. When selecting a life insurance policy, it’s crucial to consider factors such as:
- Coverage amount
- Policy length, whether a term life or a permanent life policy makes more sense (we’ll explain in detail later on)
- Premium costs
Life Insurance UK Statistics
When taking out life insurance, it is important to fully know and understand what type of coverage you’re receiving and how you could benefit from owning this style of policy. While we’ve covered the main benefits above, as a fully transparent insurance advisor, we wanted to showcase the latest UK wide life insurance policy stats and trends.
In 2021, according to the Associations of British Insurers, there were 20.7 million life insurance active policies and £15.8m a day was paid out to beneficiaries of life insurance policies and protection claims in the UK.
Life Insurance Policy Trends
According to Forbes, 37% of the UKs current population are paying into a life insurance policy. Thanks to the range of life insurance policies available on the market, there are various policies currently available. Out of the 37% of the population with life insurance policies, the trends are as follows:
- Whole life insurance – 57%
- Term life insurance – 32%
- Critical illness cover – 31%
- Joint life insurance – 28%
- Terminal illness cover – 18%
- Children’s cover – 16%
- Over 50s life insurance – 11%
The Benefits Of Taking Out Life Insurance
Apart from the obvious benefit of financial security in the unfortunate event of your passing, the pros of taking out a life insurance policy vary depending at what stage in life you take out your life insurance premium.
Pay A Cheaper Premium The Younger You Are
If you’re looking to save money on your life insurance premiums, starting a policy at a younger age can provide significant benefits. Here are four reasons why getting life insurance at a younger age can help you get affordable coverage:
- Lower Premiums: Life insurance premiums are typically based on your health and age. By starting a policy when you’re younger, you are likely to pay lower premiums because you are considered ‘less risky’ to insure.
- Longer Coverage: Starting a life insurance policy early means you can enjoy coverage for a longer period. This can be beneficial if you have long-term financial obligations, such as a mortgage or dependents who rely on you financially.
- Lock In Good Health: As you age, health issues may arise that can affect your insurability. By getting life insurance whilst you’re young, you can lock in coverage while you are still in good health, making it easier to get more affordable rates.
You Don’t Need A Mortgage To Get Life Insurance
Contrary to popular belief, you don’t need to have a mortgage to take out life insurance. There are numerous benefits, regardless of your homeownership status.
Life insurance provides financial protection for your loved ones in the event of your passing, ensuring that they are taken care of and can cover essential costs such as rent or mortgage payments, household bills, or childcare.
Other Benefits To Getting Life Insurance
By getting life insurance, you can enjoy additional benefits that provide financial security and peace of mind for you and your loved ones, other benefits include:
Business Continuity: If you’re a business owner, life insurance can help ensure the continuity of your business in the event of your passing. It can provide funds for your business partners to buy out your share or help cover any outstanding debts.
Understanding the Different Types of Life Insurance
If you’re considering life insurance, it’s important to understand the different types available. With life insurance, depending on your needs and preferences, policies can be tailored to your independent needs. Depending on what your requirements are, can determine which type of life insurance you opt for.
Term Life Insurance:
Term life insurance is a popular plan for people in their early 20s and 30s and offers coverage for a specified amount of time. This time frame can vary between one year to 30 years and offers a death benefit.
Critical Illness Cover:
Critical illness cover, unlike income protection, helps you look after your financial implications if you were to fall critically ill and unable to work. Critical illness coverage is often added as an addition to life insurance.
Find out more about the individual policies by reading on.
Term Life Insurance
As mentioned above, term life insurance provides coverage for a specific period, typically 10, 20, or 30 years. Here are four key points to know about term life insurance:
- Affordable Premiums: Term life insurance generally offers lower premiums compared to other types of life insurance, making it an attractive option for those on a budget.
- Temporary Coverage: Term life insurance provides coverage for a specific period, so if you outlive the policy term, the coverage ends. It is designed to protect your loved ones during a specific period of financial vulnerability, such as when you have young children or a mortgage. However once your term has come to an end, you can switch to another style of life insurance.
- Flexibility: Term life insurance policies often offer options for converting to permanent life insurance in the future, allowing you to extend coverage if needed. If you have multiple properties, children or businesses for example, that need looking after if you were to pass.
- Temporary Needs: Term life insurance is ideal for covering temporary needs, such as paying off a mortgage or providing for your children’s education. It can provide peace of mind during specific periods of financial responsibility.
When choosing a term life insurance policy, it is essential to work with a knowledgeable life insurance broker or a local life insurance company to ensure you select the right coverage for your specific needs and goals.
Critical Illness Cover
With Critical Illness Cover, you can protect yourself and your loved ones from the financial burdens of serious illness. This type of insurance is an additional policy alongside life insurance and offers peace of mind during difficult times. Our team of Yeovil insurance advisors offer critical illness coverage, ensuring that if you were to fall critically ill, you can focus on your health and recovery without worrying about the financial implications.
The policy provides a payout to help alleviate the financial stress for your loved ones, allowing you to concentrate on getting better. It is important to consider critical illness coverage when choosing your life insurance policy, as it can provide an extra layer of protection for you and your family.
Joint Life Insurance
If you and your partner are looking for life insurance coverage that provides financial protection for both of you, consider joint life insurance policies. Here are four things to know about joint life insurance:
- Coverage For Both Individuals: Joint life insurance covers both you and your partner under one policy. This means that if either of you passes away, the surviving partner will receive a payout.
- Cost-Effective: Joint life insurance policies are often more affordable than purchasing separate policies for each individual. This can be beneficial for couples who want to save money while still ensuring financial protection.
- Payout Flexibility: Depending on the policy, joint life insurance can provide either a lump sum payout or regular income payments to the surviving partner. This flexibility allows you to choose the option that best suits your financial needs.
It’s important to consider factors such as age, health, and financial circumstances when choosing a joint life insurance policy. Additionally, it’s crucial to review the policy terms and conditions to understand how the payout will be distributed
Things To Think About When Taking Out Life Insurance
Life insurance is a large policy that could potentially impact your family and loved ones’ financial security in the unfortunate event of the main breadwinners’ / policyholders’ death. When taking out life insurance, several things are important to consider from what you need to be included in your coverage, to providing your insurance provider with relevant and accurate health and medical data.
Decide How Much Coverage You Need
To determine the appropriate amount of life insurance coverage, consider these five key factors:
- Your Income & Expenses: Take into account your current income and expenses, including mortgage or rent payments, household bills, and childcare costs. This will help you determine how much coverage is needed to maintain your family’s financial stability.
- Debt & Financial Obligations: Consider any outstanding debts, such as credit card balances, student loans, or car loans. It’s important to ensure that your life insurance coverage is sufficient to cover these obligations and prevent a financial burden on your loved ones.
- Future Financial Goals: Think about your long-term financial goals, such as saving for your children’s education or retirement. Your life insurance coverage should provide enough funds to support these goals in case of your untimely passing.
Be Honest About Your Medical History
It’s important to be honest about your medical history when taking out life insurance. Being upfront about your medical background ensures that you receive the appropriate coverage and helps prevent any potential issues with claims in the future.
Insurance companies take into account your medical history when determining your premiums and coverage options, which then come with these benefits, including:
- Ensures accurate coverage and premiums
- Prevents potential issues with claims
- Provides peace of mind for your loved ones
- Builds trust with the insurance company
How The Levels Financial Can Help Advise On Your Life Insurance Policy
When considering your life insurance policy, it is important to understand how The Levels Financial can provide valuable advice and guidance. As a trusted provider of life insurance policies in Somerset and the South West and offers a wide range of expertise in securing insurance for individuals, ensuring that you can find the right policy to meet your needs.
According to Forbes, 36% of people with a life insurance policy used a professional broker to help them choose their policy. So, whether you are looking for term life insurance, or any other type of life insurance coverage, The Levels Financial can help. For more information or to book your initial free consultation, contact us at admin@thelevelsfinancial.co.uk or call us on 01458 772 040.
Please Note:
If you stop paying premiums your coverage could cease.
If your income increases and you do not review your level of benefit, you may not receive sufficient payments when you come to claim.
If your income decreases and you do not review your policy, you may not be able to claim the full amount of benefit you originally applied for at the start of the plan.
If you cancel your plan you will not receive any money back
You must provide accurate and honest information about your health and lifestyle, if found otherwise you may not receive payments if you claim.
We offer products from a choice of insurers
