What topics will I discuss with a life insurance advisor?

Key takeaways

• Life insurance offers a financial safety net for your loved ones if you pass away, helping them manage ongoing expenses such as the mortgage, household bills and outstanding debts

• A life insurance advisor can help explain your options, answer questions about when you should take out cover, the type of cover and amount of cover you need, and how much it might cost

• Here at MoneySuperMarket, we have partnered with LifeSearch, a firm which offers free advice on life policies, helping you find the right cover for your needs, at the best possible price

What is life insurance?

Life insurance is a type of protection designed to help your loved ones cover mortgages, debts, and day-to-day living costs when you are no longer around.

When you die, a payout is made to a beneficiary (or beneficiaries).If you have dependents, such as a partner or children, relying on your income, this cover can offer valuable peace of mind.

To find out more about life insurance and its benefits, check out our comprehensive guide.

Should I speak to a life insurance advisor?

Yes. As life insurance can be a complicated product to understand, it’s well worth seeking the expertise of an advisor. He or she can talk you through the different policy options and help you understand how much cover you should put in place. The life insurance advisor can also help make the whole process feel a lot less daunting.

How do I find a life insurance advisor?

You don’t need to worry about this, as we’ve partnered up with LifeSearch, a firm which helps you compare life insurance policies from multiple providers. LifeSearch can support you through the entire journey, from finding the right cover for your needs, to answering any questions you have – and assisting with claims. And the best thing? LifeSearch offers free advice on life insurance policies.

What topics will I discuss with a life insurance advisor?

Do I need life insurance?

Determining whether you need life insurance largely depends on your personal and financial circumstances. An advisor will explain that if you have people who depend on your income, life insurance becomes a key consideration. Mortgage life cover can help clear a mortgage or other outstanding debts. It can also provide a lump sum or regular income to help your loved ones with the cost of day-to-day living.

The peace of mind that comes with life insurance is invaluable. Knowing that your dependents will be financially secure can alleviate much of the stress associated with the uncertainty of the future.

Read more with our guide: Do I need life insurance?

When should I take out life insurance?

A life insurance advisor will talk about the importance of taking out cover at major life events, such as getting married, buying a house or having a baby. They will explain how having this cover in place can give you great peace of mind.

What are the different types of life insurance?

Your advisor will explain that there are two main types: ‘term life insurance’ and ‘whole-of-life’ cover.

‘Term life insurance’ is the most common one. This only pays out if you die within a specified period, known as the ‘term’ of the policy.

With ‘term life insurance’ you only pay premiums for the duration of the term.

The other type is ‘whole-of-life’ cover which guarantees a payout whenever you die, regardless of when that is.

With ‘whole of life,’ you commit to premiums for your entire life. ‘Whole-of-life’ policies are typically more expensive, and over time, there’s a risk you may pay out more in premiums than the eventual payout.

There are variations within term life insurance, including:

• Level term insurance – this is a straightforward and affordable option where premiums remain the same during the term. Your loved ones get the same payout, irrespective of how many years into the policy you pass away. Level term insurance is well-suited to the terms of an interest-only mortgage

• Decreasing life insurance – with this type of ‘term’ cover, the amount that gets paid out in the event of death diminishes over time. It is ideal for those with debts that reduce over time, such as a repayment mortgage. It is typically cheaper than level term insurance

• Increasing term insurance – with this, the amount insured rises every year by a fixed amount for the duration of the policy, to keep pace with inflation. This ensures your cover retains its value. Just note that this may mean premiums are more costly than other types of life insurance

How much life insurance do I need?

The amount of life insurance you need will depend on your personal circumstances, including your income, debts and mortgage. Put simple, a policy should provide enough financial support for your loved ones to cover essential expenses and maintain their standard of living when you’re no longer around.

How much it might it cost?

A life insurance advisor will explain to you that the cost of your premium will depend on a range of factors such as your age, health and lifestyle (including how much you exercise and whether or not you smoke), as well as the type of policy you choose, the amount of cover you decide to go for, and the length of the term (the ‘duration’).

Premiums are likely to be lower if you are young and healthy when you apply, with costs typically rising with age. Also note that pre-existing health conditions can mean you pay more for your cover.

How do I choose the best life insurance policy?

Selecting the right life insurance policy hinges on several factors, including:

• The amount of cover you need

• Any existing cover you may have, such as death in service benefits from your employer

• The type of cover that best suits your needs, whether it’s level term, decreasing term, increasing term, or whole-of-life cover

• Don’t forget to consider additional options like critical illness cover for further financial security

For those over 50, a specialised over 50s life insurance policy can offer guaranteed acceptance, despite the generally higher costs associated with age.

Here at MoneySupermarket, we can help you find the best value policy for your needs. We simplify the process by asking a few straightforward questions and then comparing quotes from our leading panel of insurance providers to give you the best prices.

More life insurance tips and tricks:

• Securing a life insurance policy while you are young can help keep costs down, as premiums typically increase with age

• A joint policy with your partner may be more cost-effective than two single policies, but remember that it only pays out oncee

• Setting up your life insurance in trust can prevent the payout from being subject to inheritance tax