Compare Life Insurance

What is life insurance?

First and foremost, life insurance offers peace of mind. In the event of your death, your dependants will receive a lump sum, allowing them to pay off debts, such as your mortgage and plan for the future.

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Do I need life insurance?

When it comes to exciting purchases, life insurance is never going to top the list. However, it could be an essential purchase if you have a new-born or a toddler, children of school age or a partner who depends on you financially.

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Life insurance FAQ

At Compare Cover, we compare level term life insurance, decreasing term life insurance (also known as mortgage protection life insurance) and critical illness cover from leading insurance providers.

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Compare life insurance quotes

Life insurance is our speciality and we work with leading insurance providers to allow you to compare life insurance quotes online for level term life insurance, mortgage protection insurance and critical illness cover.

Over the years we've built up extensive industry knowledge, resulting in a clear and flexible expert service. As such, we can provide detailed information to help you compare life cover online and make an informed decision.

When you use our online life insurance comparison service to get quotes, we'll ask the provider to reduce our commission* which lowers your premium. This means our rates are more competitive than buying direct from insurers or your bank.


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Level Term vs. Mortgage Protection - Whats the difference?

Level term life insurance

There are a number of reasons why people take out level term life insurance; if you have debts that would need to be paid off in the event of your death, if you don't think your dependants would be able to cope financially if you died or to provide money for events that you wish to happen after your death, such as your children's schooling. This could also include financial support for your children's futures, for example house purchase deposits.

If you have a mortgage and would like your dependants to be able to pay off the outstanding capital if you died, level term insurance may be suitable. Many people in such circumstances will also consider Mortgage Protection Life Insurance (which is also often referred to as decreasing term life insurance).

Mortgage protection life insurance

As the name implies, mortgage protection life insurance is designed to pay off your outstanding repayment mortgage in the event of your death. This means that in the event of a claim, your dependants will receive a lump sum intended to pay off your mortgage in its entirety, ensuring that your loved ones won't have to worry about losing their home in addition to losing you.

If you have a repayment mortgage the amount of the outstanding mortgage decreases over time. In a similar way with a mortgage protection life insurance policy, the amount of life cover the policy provides decreases in line with the outstanding balance of your repayment mortgage.

Calculating Life Insurance Cover Costs

People often ask how life insurance costs are calculated. Your life insurance premium is dictated by the amount of cover that you require, the number of years your policy will run for, the type of policy that you decide to take out and various personal factors.

These factors can include your age, general health, medical history, lifestyle, the regularity that you travel to foreign countries (where health risks may be higher), and the level of danger that your hobbies or job may expose you to. The financial needs of your dependants - such as existing debts, school fees, mortgage and reliance on your take-home pay - can all help you determine a level of cover suitable for your situation.

How to Choose a Life Insurance Policy

When deciding on the right life insurance policy for you, it may be worth taking into consideration the amount of money you would need to leave behind in order to protect your loved ones, should anything happen to you. This sum should take into account their financial situation, as well as any outstanding debts you may have, such as a mortgage.

Mortgage protection life insurance may be a good option to consider if you're looking for a policy to pay off a repayment mortgage after your death. You select the cover and term to match your mortgage debt. With this policy, as your mortgage decreases the level of cover will decrease over the term. This can be a cheaper option because the cover reduces and typically this type of policy only covers your mortgage repayments and not any other debts you may have, such as credit card debts or bank loans. This policy could be right for you if want to ensure that your partner will not lose their home as a result of your passing.

Level term life insurance provides a fixed level of cover, defined by you, for the policy term - so premiums tend to be higher. You may want to consider this option if you have dependents who may struggle without your income, such as children or a partner. This kind of policy may help those left behind with any outstanding debts and mortgage repayments. You could use a level term policy to leave a little extra behind to cover future expenses like university fees or holidays and even cover the cost of your funeral.

Our guide on how to choose life insurance can assist when you are looking to select a suitable type of policy for your circumstances.

Writing a Life Insurance Policy in Trust

Should your life insurance policy be written in trust, the policy proceeds can often be directly paid to your chosen beneficiaries within just a few days of a claim being raised. Writing a policy in trust may also help avoid a payment being liable for inheritance tax if it's above the threshold set by HMRC.

When a policy is not written in trust, the proceeds will count as a part of your estate, so they will also have to go through probate which could be more time-consuming.

If you have any questions about policies, such as information about when your employer provides life insurance, or how the time of death within the term of a mortgage protection life insurance policy can affect pay out, please consult our Life Insurance Guides, where you'll discover information you may find useful.

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