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How to Choose Life Insurance

Let’s be honest, most of us don’t want to think about the possibility of death. It is scary to think of a day when we will not be there to support, encourage and care for our loved ones. It can be even scarier to think of how they will cope when we are no longer around. We spend our lives trying to do the best by our families. We can continue to do so even after we are gone.  

Life insurance is a way in which to secure your family’s future. By investing in the right policy, you can ensure any expenses cropping up due to loss of income or from your own passing e.g. funeral expenses can be covered. This takes a massive burden off your family’s back at an already difficult time.  

We do know, however, that on looking into life insurance it can seem like a mammoth task to search around and make sure you are getting the correct cover – and at the right price! Here we have put together a handy guide for any and all questions you might have about life insurance, to make things nice and simple for you. 

Why do I need life insurance? 

As mentioned above, life insurance is a great way to safeguard your family’s financial well-being. Getting the right policy in place can be the difference between your family struggling and getting by, at a time where they will have so many other things on their plate.  

There are many options for cover, so you needn’t worry excessively about cost. You will be able to find something that works well for what you need at a fair price. 

How to choose my life insurance provider 

When choosing a life insurance policy, the first decision that might throw you is which provider you should go with. There are many great providers out there so you may find it difficult to decide which one works best for you. Here is a breakdown of some of the main life insurance providers currently protecting families across the UK: 

  • AVIVA  
  • Legal and General 
  • AIG 
  • Royal London 
  • AEGON 
  • Zurich 
  • Scottish Widows 
  • Canada Life  
  • Liverpool Victoria (LV) 

These providers will all have pros and cons depending on the type of cover you are after. 

The best thing for you to do first of all, is decide the type of policy you are wanting and how extensive you want your cover to be. That way you can evaluate which provider best suits those needs.

If you are stuck, we here at iam|INSURED are experts in life insurance with over 20 years’ worth of experience. We are able and more than happy to do these comparisons for you to simplify the process.   

How to choose the right policy: the different types of life insurance policy available 

Another big decision for you in this process, if not the biggest decision, is deciding on the type of policy you need. There are a lot of different options out there you. This is great as it gives you a lot of room for manoeuvre in terms of policy length, cost etc. But we do understand this also makes things tricky, as it means it can be hard for you to decide what kind of policy is best for you. 

Here we will outline the types of policies available to you: 

  • Family life insurance (level term): Level term life insurance is also known as family life insurance because it has been specifically designed with families in mind. If you die during the term of this policy your family will receive a cash lump sum at an amount guaranteed to stay the same through the duration of your policy. This is why it is known as being ‘level’. 
  • Mortgage life insurance (decreasing term): A mortgage life insurance is designed to cover a standard “capital and repayment” mortgage – a mortgage in which you make monthly repayments to pay off the capital and interest for a fixed period of time. The amount of cover you have with this policy will reduce at roughly the same rate as your mortgage, meaning you will have enough cover left to pay off the remainder of your mortgage if you were to die – meaning your family home would be paid off. 
  • Whole of life insurance: Whole of life insurance is similar to a fixed term policy such as family or mortgage life insurance – the main difference being that you are guaranteed a pay out. It is a very long-term policy though, so you need to be sure it is right for you before committing to it. 
  • Critical illness cover: Critical illness cover is very similar to typical life insurance except it is designed to pay out to your family if you were to be diagnosed with a serious medical issue. This could be a great financial help if you were unable to work for an extended period of time due to illness. 
  • Income Protection insurance: If you are unable to work due to illness or injury, income protection is designed to pay out a monthly amount to you to cover your expenses such as mortgage, utility bills etc. This is particularly useful for people who are self-employed meaning their business would suffer if they were unable to work. To qualify for your claim, you need to be signed off work by your doctor or GP for a set period of time (usually 4 or more weeks). 
  • Personal accident insurance: This cover is designed to protect against things such as broken bones, accidental death, accidental permanent injury etc. You can also pay extra for additional benefits such as children’s cover – in which you could claim to cover loss of income, if you had to take time off work to help your child recover from an illness or injury. 
  • Business life insurance: There are several types of business life insurance policies such as key person insurance or shareholder protection. Income protection can also be rolled into this. Most of these policies will only be relevant to you if you are a business owner or receive your life insurance through your employer. 
  • Relevant life insurance: Relevant life insurance is a very specific type of business life insurance, designed to be a tax efficient way for businesses to insure the lives of their employees. This type of policy allows a smaller business to offer a ‘death in service’ policy, often to its highest paid employees such as company directors. Speak to your employer if you think this is something that may work for your company.  
  • Over 50s life insurance: There are specific policies designed with people over the age of 50 in mind. You can usually take this out at any time between the ages of 50 and 80 – though it is always best to lock down cover early to avoid higher premiums! Usually these policies are guaranteed, meaning your loved ones will definitely receive a pay out when you pass away.  

Taking out any one of these policies is the number one way in which you can protect yourself and your family. The absolute best thing you can do today is consider taking out a policy to protect yourself and your loved ones. You can start by getting a quote in only a few minutes.

The pros and cons of the different types of life insurance 

There are pros and cons for each of the policy types mentioned above. We have put together a handy table featuring the benefits and disadvantages of each one, so you can compare and decide what sounds like the right fit for you. 

Type of insurance policyProsCons
Family life insurance (level term) Financial protection for your family  The pay out will be the same, no matter how far through the term of your policy you are Possibly more expensive than reducing cover premiums  When your policy has ended you will lose your cover Inflation isn’t considered unless added to the cover 
Mortgage life insurance (decreasing term) Your premiums should be lower than with a level term policy  You can cover more than one mortgage (multiple properties) Protection for your family home and the knowledge your family will be mortgage free By design, the amount of cover you have will decrease the further you are into your policy The policy only covers your mortgage without including additional cover for your family The policy will need to be reviewed if you choose to remortgage 
Whole of life insurance Guaranteed pay out to your loved ones You won’t be charged income tax on the payment to your family Potentially higher premiums so you may have to consider if you can afford them long term, even after retirement 
Critical illness cover You can receive a tax-free cash lump sum upon diagnosis of a serious illness/medical condition, meaning more financial security for your family On average, 91.3% of claims are accepted and paid out 8.7% of claims on average are rejected, meaning there is a slim chance you won’t receive a pay out when needed 
Income protection insurance Protection for any potential loss of income due to accident or illness Monthly payments to cover the costs of bills/mortgage repayments etc. TAX-FREE: With income protection claims there is no taxable element, except under very specific circumstances. There may be an ‘exclusion’ with your cover, usually if you have a dangerous job or hobby. This just means your policy will pay out for most things but not your excluded activity e.g. if you get injured skydiving. 
Personal accident insurance There is no limit to the number of claims you can make in fact, 21% of customers have made more than one claim. You may have to pay extra for additional benefits such as active lifestyle cover. 
Business life insurance There are several types of business life insurance: for more details see the link above There are several types of business life insurance: for more details see the link above 
Relevant life insurance Up to 49% tax savings due to these policies being HMRC approved Portable (can be converted to personal cover if you leave the business) Owned and paid for by the business rather than you personally It would be up to your employer to take out this policy on your behalf and they will be responsible for making sure to pay all the premiums – less control for you over your policy terms 
Over 50s life insurance Guaranteed pay out to your loved ones, as long as you continue to pay your premiums Fixed premium rates and a fixed payment to your beneficiaries  The longer after 50 that you wait to take out life insurance, the higher your premium will be  Smoker rates are higher for over 50s: it may be worth trying to quit to reduce the cost of your policy 

How to apply for life insurance: a quick guide to the process 

It is so important to make sure you look after the future well being of your family, life insurance is hands down the best way to do this. But we do understand you may have a busy life – especially if you have children keeping you running around every minute of the day. You may be worried that applying for life insurance is a long, overly complicated process. Do not worry, generally this isn’t the case.

Here we have outlined the steps you will need to take in order to get life insurance: 

  • Be over 18 and live in the UK: It really is as simple as that for the first step. As long as you are a UK resident over the age of 18, you are eligible for life insurance from a number of the UK’s biggest providers.
  • Decide how much cover you need and how long for: It is helpful to go into the process already having a rough idea of what you are after – even if you’re not 100% sure on all the specifics. The insurance provider or independent adviser will be able to help with any questions you may have, such as if you may need more or less cover than you thought.
  • Speak to an adviser: Some people may choose to skip this step and go directly to an insurance provider. If you know exactly what you are after and choose to do that, that is absolutely fine. The job of an insurance adviser is simply to be a friendly resource, there to answer any questions and help you compare deals if you are unsure of the best cover for you.
  • Answer some questions: In order to be insured, you will have to answer some questions about yourself such as your name, date of birth etc. This will then be followed up with questions about general health and lifestyle.
    It is important you are completely honest when doing this. There will be no judgement for your answers, but if you feel the need to leave any details out this could invalidate your policy at a later point. This then may be followed up by further questions about yourself, such as if you have any hobbies that could be classed as dangerous e.g. mountaineering or diving.
  • Underwriting: Underwriting is the process in which the provider will assess the answers you have provided to their questions and decide whether they need any further information from you. If they do require more information, they will be in touch to gather this. Once they have everything they need, they will make an informed decision on whether to go ahead with your policy.
    Occasionally, you may be offered cover without a need for further questions but for certain policies, the insurer may need a medical report from your GP or another health care professional – the insurer will usually cover any costs associated with this. There could be delays in your provider receiving this report so don’t be surprised if it takes a few weeks for them to get back to you.
  • Receiving a decision on your policy: At this point in the process, the insurance provider of your choice has all the details they need to decide how to proceed with your application. There are several possible outcomes:
    • Accepted: The provider is happy to go ahead with your policy.
    • Postponed: There are instances where the provider may wish to postpone your application for a few weeks or months. This could be due to a number of reasons, usually something to do with your health e.g. you are waiting on the confirmation of a diagnosis.
    • Declined: Sometimes for one of many reasons, the provider may decline your application for life insurance. It is unfortunate but it does happen. But do not worry this is not necessarily the end of the road on your quest for great cover.
  • Try again: There are scenarios in which your insurance provider will decline to move ahead with your policy. This can feel like a disappointing and frustrating outcome. Don’t worry though. Just because you have been declined through one insurer does not automatically mean you will be unable to get cover elsewhere.
    You can speak to an independent adviser, such as us here at iam|INSURED, who will be happy to help you find a provider willing to cover you. You may also choose to do this if a provider has decided to postpone your application and you are unwilling to wait for your cover to begin.
  • You’ve been accepted!: Whether your acceptance was straight away or you had to apply again to another provider – that doesn’t matter. What matters is you now have great cover to suit your needs.
    And don’t forget, this doesn’t have to be the end of this process. It is always worth re-evaluating your policy at key moments in your life, such as a marriage or the birth of a child. Believe it or not you can still cancel or change your policy once it is in place.
  • Relax! And enjoy your life knowing that your family’s future is secured. 

How to get life insurance through your employer 

It is worth checking with your employer, to see if you are entitled to life insurance through your job role. Whether this is the case, will depend on each individual workplace. There are policies such as relevant life insurance that may be able to be put into place – if your employer is happy to cover the cost of your premiums. 

If you can receive insurance through your employer, then that is great news. This means you do not have to worry about arranging your own insurance. However, depending on the type of cover offered and how extensive it is, you may still choose to take out a personal life insurance policy as well for that extra, added protection. 

If you are a business owner and considering taking out relevant life insurance for your staff or yourself, take a look at our page on relevant life insurance for extra information on how you can best protect your employees- we are sure they would greatly appreciate your looking out for their best interests.

Trusts: what are they and why do I need one? 

Have you ever heard about what a trust is? If not, don’t be alarmed you are probably not the only one. A trust is a way in which you can assure that all of your wishes for what happens to your estate are undertaken, on the event of your passing.  

A trust gives you greater control over who benefits from any life insurance pay out, meaning the money from your policy cannot be automatically used to pay for things such as outstanding debts. 

In recent developments within the insurance industry, you now have the option of writing a trust into your life insurance policy. There are several benefits to this such as: 

  • Being able to specify beneficiaries: you can specify exactly who you would like to benefit from any pay out from your life insurance policy. Your beneficiaries can be anyone you choose for example a spouse or partner, your children, a friend or even a charity of your choice.  
  • Being able to nominate a trustee: you can nominate a person who is then responsible for making sure all of your wishes are carried out. When you do this your trustee legally owns the policy and must keep the trust deed safe as they will be the one to make a claim to your insurer when you pass away. 
  • Tax benefits: With a trust, you can usually avoid paying inheritance tax (IHT) on your estate. There are occasions where inheritance tax can take almost 40% of your estate so avoiding this would be a great outcome. 
  • Faster access to your life insurance pay out: Without a trust in place alongside your policy, your beneficiaries would have to go through a process called probate. This can cause major delays in your beneficiaries receiving payment from your provider. A trust will ensure that your loved ones will be able to receive a payment within a few weeks of obtaining a death certificate.  

We know it most likely still seems a little complicated to write a policy into trust, we promise you it really couldn’t be simpler. Do not worry, even if you don’t understand the process fully, businesses like iam|INSURED are here so you don’t have to! We can organise the trust process for you, meaning all you have to do is sit back and we will take care of the rest.

Can I afford to pay for life insurance? 

Contrary to popular belief, you don’t have to pay an arm and a leg in order to receive comprehensive life insurance cover. There are so many various types of cover and a lot of great providers, so with a bit of research you should be able to find an insurance plan at a fair price.  

Think about it, we all like a treat every now and then. An extra coffee on the way to work. A new top or a nice meal on pay day. Why not think of life insurance as treating yourself to your own peace of mind. Plus, we can assure you that most likely you would pay way more for a new pair of trainers than you would ever pay for a monthly premium.  

We can assure you that any costs associated with paying for a life insurance policy will be more than worth it in the long run. You want to make sure that your family is financially secure in the event the worst happens, and you are no longer around to care for them. If you are unsure how much you can afford to pay for life insurance, it may be worth sitting down and looking at your monthly income and expenses to work out what you can afford to pay for a monthly premium. 

Can I get life insurance if I have an underlying or pre-existing medical condition? 

As someone with a pre-existing condition or illness, you may be wondering whether this will prevent you from being able to take out life insurance. We want to assure you this worry is unfounded. Most providers will still be able to provide you with an excellent level of cover. You will just have to take your medical conditions into account when calculating any potential premiums you may pay, as they could be slightly higher depending on the condition. 

It is also worth considering that your application process may take slightly longer than normal, so it is worth getting started on it as soon as possible. There have been cases where we have seen the application take several months, due to providers waiting on reports from GPs.  

There are many pre-existing conditions that insurers are willing to cover. Please don’t be afraid that great cover simply won’t be available to you. Below we have examples of some conditions that policy providers will still cover in most cases (plus there are many more):  

Diabetes  Multiple Sclerosis Epilepsy Asthma  Mental illness 
Cancer (e.g. prostate and lung cancer Heart disease Kidney disease Auto-immune diseases (e.g. colitis) Crohn’s disease 

Don’t let the concern that you may be declined for a policy deter you from applying. We are experts in this field and can assure you that most of the time this wont be the case. And even if one provider won’t cover you – most likely there will be another one out there that will.

I want to take out life insurance but I’m still unsure of what cover I want or where to begin with this process 

If you have come to the end of this article, you most likely understand now just how vital life insurance is. It truly is the best way to ensure your loved ones are provided for if you can no longer do this yourself. The best thing you can do for your family today is to lock in exceptional cover – and at a price that suits you!

Here at iam|INSURED, we are life insurance experts. If you are still unsure as to what the best option is for you don’t hesitate to contact us. We have an experienced team on hand, ready to give you FREE advice and answer any and all questions you may have about life insurance.  

Get in touch today at 0800 009 6559 or CLICK HERE for a hassle free, quick quote. 


Below we have a list of helpful resources if you would like further information on some of the topics covered above: 

Legal and General – Putting life insurance into trust 

HSBC UK – Do I Need Life Insurance? | Why Have Life Cover 

Post office – 6 reasons why you need life insurance 

Aviva – Can you get life insurance with a pre-existing condition? 

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