| Types of insurance | Pros | Cons | Good for |
|---|---|---|---|
Decreasing |
Cheapest option |
Pay-out decreases overtime |
Covering a mortgage |
Level |
Same pay-out for the whole cover period
| Typically costs more |
Covering everything you need to, for a set period |
Whole |
Cover for life with a guarenteed pay-out
| Costliest option |
Ensuring you always leave something behind |
Help with calculating your cover
How much life insurance do I need?
Struggling to settle on the right amount? We can help!
Life insurance calculator
Estimate how much cover you need with our handy calculator
Who can I cover on a family life insurance policy?
Most policies will only let you cover those over age 18. But some offer limited cover for your kids too. If they do, you’ll be given a set amount you can claim for if, tragically, one of your children passes away.
This could be used to cover funeral costs, or simply to make life financially easier at a very difficult time. Claiming for a child won’t affect the rest of your policy either, so you’ll still have life cover if you do need to make a claim and will still get the same pay-out if you were to pass away.
While there’s a minimum age you’ll need to be to take out a policy, there’s usually no upper age limit. Standard life insurance policies will also usually cover you up to any age, although you may get a better deal with a dedicated over-50s policy. Over 50 life insurance policies will offer you guaranteed cover up until age 84 and will normally cover you beyond that if you answer a few medical questions.
For joint policies, as long as you live at the same address, and are both over 18, you’ll be able to share cover. You don’t need to be married, or even in a relationship. You could even cover yourself and a child, as long as you’re both over the minimum age.
So there’s plenty of ways to get life insurance cover for the ones you love.
Can I leave my life insurance pay-out to my children?
Yes, but there are a few things to consider before you do:
- Children cannot inherit from a will if they’re under 18. You’ll have to nominate a trustee to look after your pay-out until your children come of age. Once they do, the money can then be transferred to them.
- If you want your pay-out to go to your family as a whole, you could nominate your partner as the inheritor, and they could use the pay-out to support themselves and your kids.
- If you’re a single parent or would rather the money went directly to your children, you’d need to make this clear in your will.
Another way to do this would be to put your life insurance pay-out into a trust. This is known as writing life insurance in trust, and it ensures that your pay-out goes to exactly who you want it to. If your kids are under 18, you’ll again need to nominate a trustee to oversee the money until they come of age. But with a trust, you can specify when your children get the money. If you think 18 is a little young to be receiving a large pay-out, for example, you could ensure that they couldn’t access the money until age 25.
Trusts also usually allow your beneficiaries to get their pay-out quicker. With a will, your pay-out may have to go through probate, which can take a long time. With a trust, it usually doesn’t.
Writing your life insurance in trust also allows you to avoid paying inheritance tax on your pay-out, which can happen if the money from your policy pushes your estate - the sum total of everything you leave behind after you die - to more than £325,000. Without a trust, anything above this £325,000 threshold is taxed at 40%.
Should we think about joint life insurance?
Joint life insurance lets you cover two lives at once, so it’s particularly well suited to families.
With both you and your partner insured, you’d know that your kids would be looked after financially if either of you passed away.
This isn’t the case with individual life insurance, where only one of you is covered. This can cause issues if the uninsured partner passes away, leaving the surviving partner and any kids they had with only a single income, and no pay-out to make up that loss. While this may not have a devastating effect if the deceased partner isn’t the main earner, it could still bring unwelcome financial difficulty to an already tragic situation. Joint life insurance avoids that, so you know that no matter what happens, your loved ones would be supported.
What our life insurance expert says
Life insurance is all about providing for your loved ones after you’re gone, and finding the right policy is key to that. If you only want to cover your mortgage, we have policies for that. But if you want to leave a little more behind, try level term life insurance.
Max Green
Life insurance expert
What are the different types of life insurance?
Joint life insurance
covers two people on a single policy, paying out if either of you dies during the policy term
Over 50s life insurance
offers cover for the over 50s, with acceptance guaranteed up to age 84. No medical or health questionnaires required
Critical illness cover
pays out a lump sum if you're diagnosed with an illness covered by your policy
Health insurance
covers the cost of private medical care, helping you avoid NHS waiting lists to get the cover you need, quickly
Life insurance guides
What is life insurance?
What do you need to know before signing up? Find out here
Different types of life insurance
Confused over which policy type to get? Find the perfect fit here
What is joint life insurance?
Should you get a single or joint policy? We look at the pros and cons
Death in service benefit
Do you need life insurance if you have death in service? We take a deep dive here
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