What is Life Insurance?
Stepping into your new home or holding your new born baby are joyful experiences. However, both of these life developments also come with a certain amount of pressure. If the worst happened and you or your partner passed away, who would pay for the mortgage? Would your family be able to cope financially with the loss of your income or the costs associated with what you provide such as childcare and managing the home? This is where life insurance comes in, but what is life insurance and how can it help?
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.
In this guide, we'll answer the key question "what is life insurance," along with many other queries, to help you make an informed decision about your life insurance needs.
Do I need life insurance?
Whether you need life insurance or not will depend on your circumstances. If you are single and have no dependants then it's likely to be an unnecessary expense. However, if you are supporting people financially, have a mortgage or other debts then it is something that you should seriously consider.
People who commonly require life insurance include sole breadwinners (those who are the only earners for their family), stay-at-home parents (whose death could result in paid childcare being needed) and single parents. If you are a couple and you both work, you may still need life insurance if either of your salaries could not independently financially support your household.
Visit our Do I Need Life Insurance page to find out more.
What types of life insurance are available to me?
There are a number of different types of life insurance and the best one for you will depend on your particular circumstances. At Compare Cover, you can get quotations and purchase the following types of cover:
Level term life insurance - An agreed sum is paid out in the event of your death during a chosen period/policy term. Find out more on our Level Term Life Insurance page.
Mortgage protection life insurance - This is also known as decreasing term life insurance, in which the amount of cover decreases in line with a standard repayment mortgage. Find out more on our Mortgage Protection Insurance page.
Critical illness cover - This can be purchased alongside or integrated into level term life insurance or mortgage protection insurance, and will pay out if you're diagnosed with a specified critical illness during the term of the policy. Find out more on our What is Critical Illness Cover page.