Life assurance is a type of cover that guarantees a payout whenever you pass away, rather than only within a set time frame like standard (term) life insurance. It's a long-term option for those who want certainty that their loved ones will receive financial support in the future.
Whether it’s helping your family cover everyday living costs or paying off debts, it could provide peace of mind that your loved ones will be looked after when you pass away. But why else do you need it? Here are some of the key benefits...
Talk to a life insurance expert today...
Guaranteed payout
Unlike term life insurance (which only pays out if you die during the term), life assurance guarantees to pay out a lump sum whenever you pass away. In doing so, the policy provides certainty that your loved ones will benefit.
All you have to do is continue to pay your monthly premiums in order to stay covered. If you fail to do this, your policy could be cancelled by the insurer.
Although term life insurance is often cheaper, the policy has an expiry date, so if you outlive the term, no payout is made. With life assurance, you don’t have to worry about this. No matter when you pass away, your family will still receive a lump sum.
Financial security for your loved ones
If you have loved ones who depend on you for financial support, your death could impact them significantly. Just like life insurance, life assurance could help your dependants cover:
Household bills and utilities.
Mortgage or rent payments.
Child support and childcare costs.
Education expenses, including school fees or university costs.
Day-to-day living expenses such as food, clothing, and transport.
In some cases, the payout may also be used to help your partner reduce working hours to spend more time with your children. Or it could provide a financial cushion that allows your family to adjust to life without your income.
By easing these financial pressures, your family can focus on what really matters rather than worrying about money.
Funeral cover
Losing someone is never easy, and the last thing you’d want is for your family to worry about how they’re going to afford your funeral costs. Whether you wish to be buried or cremated, the costs can quickly add up for your loved ones.
This might not be a concern if you have a funeral plan, but death can happen at any stage. If you're younger, chances are you haven't given it much thought.
With life assurance, a payout could be used to help your family cover costs such as the coffin, service, burial or cremation fees, flowers, and the wake.
Inheritance Tax benefits
When you die, everything you own (including property, savings, investments, and possessions) is added together to form what’s known as your estate. Although life assurance payouts are not subject to income tax, they can form part of your estate and may therefore be liable for inheritance tax (IHT).
If the total value of your estate exceeds the IHT threshold (currently £325,000), anything above this limit could be taxed at 40%. This means your loved ones might receive less than you intended.
One of the major benefits of life assurance is that policies can often be written into trust. In doing so, the payout goes directly to your chosen beneficiaries rather than forming part of your estate, protecting it from IHT.
Not only can this help reduce the amount of tax payable, but it also provides your family with quicker access to funds, without having to go through probate.
Peace of mind
Knowing your family will be supported after you're gone can be a great weight off your shoulders. This peace of mind works both ways. For you, it means being able to plan for the future with certainty.
For your family, it means knowing they’ll be able to cope with the financial impact of losing you. Whether it’s keeping up with the mortgage, paying household bills, or covering everyday expenses, life assurance can make all the difference.
This kind of security is especially valuable if you have dependents, large financial commitments, or ongoing responsibilities. Without your support, loved ones may find it difficult to make ends meet, particularly with the rising cost of living.
Speak to a whole life expert today
Cons of life assurance
Higher premiums
Due to the guaranteed payout of life assurance, it tends to be more expensive than term life insurance which you could outlive.
May not be cost effective
Due to the fact that a life assurance policy doesn’t expire and aims to pay out whenever you pass away, it’s sometimes possible to pay more in premiums than the policy is worth. Because of this, please speak to a life insurance expert to help ensure this is the right policy for you.
Who needs life assurance?
There are plenty of people who can benefit from life assurance, as it offers security and certainty that term life insurance doesn’t. While anyone can take out a policy, it’s particularly valuable for:
Parents
Young families
People with lifelong financial responsibilities
Those looking to leave a guaranteed inheritance
Individuals with larger estates
All in all, life assurance is most useful for anyone looking for certainty. If you want to make sure your family or chosen beneficiaries receive financial support whenever you pass away, life assurance could be the right option.
Ready to apply for life assurance?
At Cavendish Online, we make it as simple as possible to get covered. You can choose the option that works best for you:
Apply online
Complete a quick form and get some of the UK’s lowest premiums in just a few clicks. You could be covered in as little as 30 minutes. Apply for a quote to get started.
Apply over the phone with guidance
If you know roughly what you’re looking for but would like a little support, our friendly guidance team can provide quotes and help you through the application process.
01392 241 850
Monday–Friday, 10am–6.30pm
Apply over the phone with advice
If you’d prefer tailored recommendations or have more complex needs (such as medical disclosures or high-value cover), our advised team can research the market and find the best policy for you.
01392 436 193
(Monday to Thursday 9am – 5.30pm, Friday 9am – 5pm)
Please note: The insurance products offered by Cavendish Online have no cash-in value at any time. If you stop paying your premiums, your cover will stop, your policy will end, and you will receive no benefit.
