If you’ve been following our blog series, you’ll have seen that we’ve been shedding light on some of the most common insurance types in the industry. Today, we’re going to be exploring life cover and outlining exactly what it can be used for and who might need it. 

The definition of life cover 

Life cover is another term for life insurance or death cover and can pay out a cash sum if you pass away. It can either be taken out as an individual policy or alongside critical illness cover. 

There are many different reasons why someone might want to take out life cover, but the most common one is that the payout can help your loved ones to avoid financial hardship. The money can go towards funeral costs, debt payments, mortgage and rent costs, and even day-to-day family expenses. 

Consider this… 

Often people wonder if they’d benefit from life cover. The truth is, most people could. Start thinking about what would happen if you passed away. Who do you financially support currently? Who will need your financial support in the future? How would they cover costs like bills, living expenses, education and even funeral payments? 

Put simply, if you have anyone that depends on your income, it might be worth taking out a policy. If you’re single or your partner would be able to cover general expenses and costs without your salary though, you might want to consider another type of insurance. As with any insurance policy, it’s wise to check that you don’t have some sort of cover already through your employer. 

How life cover works 

Just like other insurance policies, life cover would pay out a lump sum or regular payments, if certain requirements are met during the term. The amount your loved one would receive depends on how much you pay and the type of cover you took out. The cost of life insurance depends on the level of cover, how long you want to be protected for and a few other factors related to your lifestyle and health. 

There’s also a few different types of life cover so it’s important to weigh up exactly which one will benefit you and your family the most:

• Term life insurance typically runs for a set period of time such as 5-25 years and only pays out if you pass away during that time. Within term life cover, there are three different types. Level pays a sum of cash if you pass away during the term, decreasing cover means the level of cover decreases over time and is ideal for paying off mortgages which also decrease, and increasing is when the level of cover rises every year to keep up with inflation rates.
  
• Whole of life insurance pays out no matter when you pass away as long as you’ve kept up with your monthly payments. The main drawback of this is that if you live longer than you thought, you might be paying more than you’ll get out. 

• Over 50s life cover is exactly that. This type of cover would pay out when you pass away but, again, you might end up paying in more than you’ll receive.
  
• Joint life insurance covers two lives. If you were to pass away, the money would be given to the surviving policyholder until alternative arrangements have been made. This type of insurance cover is usually more cost-effective than taking out two policies but it will only pay on the first death. Two single life insurance policies would pay out on each death. 

Alternatives to life cover 

Any type of insurance is personal to you and should give you peace of mind if the worse were to happen. Therefore, it’s important to ensure that it fits your needs. Take life insurance, for example, this type of cover will pay out when you pass away – not if you lose income because of a diagnosis. 

If you have loved ones who are dependent on your salary, life insurance could be a good choice. But if you’re single, have a partner who doesn’t depend on your salary or simply want to protect your own salary, you might be better off looking into income protection. 

Why choose Moore Health & Protection

Whether you want to discuss life cover insurance or want to weigh up other insurance options, Moore Health & Protection can help. For more than 20 years, we’ve been supporting individuals, families and employers to protect the most important things in life and we do it without a fee. 

As an independent local intermediary with Chartered Insurance Industry accreditation, you can trust that we’ll do the job right too. What’s more, we won’t just sign you up to one policy if we think another type suits better or that we could get you lower premiums. So if you’re ready to start thinking about your future today, and want to put a plan in place to financially protect those you care about the most, get in touch with Moore Health & Protection.

Moore Health & Protection is a trading style of Tony Moore which is an appointed representative of The Right Mortgage Limited. The Right Mortgage Ltd is registered in England and Wales no. 08130498. Registered Address: 70 St. Johns Close, Knowle, Solihull, England, B93 0NH.