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What different types of life insurance are available? A video guide


Life insurance can be complicated and something that most people don't like to think about but it is a cost-effective way of protecting your family or mortgage in the event of your death.

Matt Lloyd, head of life insurance at explains exactly the different types of life insurance that are available is in this short video.

Video transcription

There are two main types of term life insurance. There’s level term life insurance and there’s decreasing term life insurance; which is sometimes referred to as ‘Mortgage Protection’ or ‘Mortgage Life Insurance’.

Level term life insurance does what it says on the tin – by that I mean the amount of cover you choose at the outset – which is sometimes called the ‘sum assured’ – remains level throughout the term of the policy.

So for example, if you took out say £100,000 worth of cover over a 25-year term, whether the policy paid out on day one, or the very last day of cover almost 25 years later, it would pay out that same £100,000 amount.

The alternative is decreasing term life insurance or ‘Mortgage Protection’. With this type of life insurance the cover amount reduces over time.

These kinds of policies are designed to cover the outstanding balance of a standard repayment mortgage, so as your outstanding mortgage amount reduces as you pay more and more of it off, the amount of cover with this type of policy would also reduce in a similar fashion.


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