Products + Services

Individuals and Families

Life Cover

The cover and ensuing cost depends on three things.

• The amount you are able to pay as the higher the cover the more it costs. The first priority for most people is usually straightforward mortgage protection which is designed to pay the mortgage balance should you die. However the amount of cover should also take into account any other outstanding debts and allow your dependents to maintain a reasonable standard of living. Do check though whether your employer provides a "death in service" benefit as this may provide a certain amount of cover already and may therefore reduce the overall amount required. Do check though whether your work place provides a 'death in service' benefit. If it does, deduct the amount it pays out from the total cover you need. Cover may also be needed for a non-working spouse or partner, especially when children are young, as if the spouse or partner died, the main earner may need to stop working. Level term is important protection for those who have children or a spouse or partner who would suffer financial loss if you died, but affordability also counts, so if the appropriate cover is too costly, it's better to have some than none if it's relevant. 
• How long should cover last. A policy intended to provide for children should last until they finish full time education, or for a partner until the earner reaches pensionable age. Don't feel obliged to cover a round number of years e.g. policies may be for 17 years.
• Your lifestyle can make the cost of cover cheaper. The amount paid increases with the likelihood of death within the term - age, health, being a smoker and having a risky occupation, can increase the price. Couples can have joint or separate cover.
  
  As noted, couples can choose either separate policies or joint policies which most commonly pay out on the first death. This means that once the policy has paid out cover will no longer be available - for example if the policy pays out on first death then there will be no life cover remaining for the surviving policy holder should they die. And it could be that replacement life insurance cannot be obtained due to health reasons. Policies can however be written on different life and event options depending on your requirements. It is also possible that two seperate stand alone policies could work out to be a more appropriate option.
  
  If you die the life assurance payment will form part of your estate, which means that the value of your estate could be liable to Inheritance Tax. In many cases you can avoid this by writing the policy in trust - which means the payment(s) goes direct to your beneficiaries, avoiding inheritance tax. This is relatively easy to do as most insurance policies include the option (and papers) for writing

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