Life insurance is something that everyone should consider at some point in their lives. It allows you and your loved ones  to plan for the future and provides financial security for our loved ones. The question is, which is the best life insurance policy for your personal situation?

Why do I need life insurance cover?

We all want to live longer, healthier lives. Unfortunately, no matter how much we try, some things happen that we cannot control. Life insurance is designed to provide financial protection for your family in the event of your death.

If you pass away during your policy term, your insurer can pay out a lump sum to your loved ones. This provides your family with financial support for future costs, such as:

The types of life insurance

Life insurance policies come in various forms. There are two main types of life insurance policies: term and whole. Each of these policy types has its benefits and drawbacks...

Whole life insurance (also known as 'life assurance')

Whole life policies provide permanent protection against death, as they have no fixed term. Therefore, the policy pays out regardless of when you die - so long as you continue paying your monthly premiums. 

These premiums are paid throughout your lifetime. After your death, your beneficiary receives a one-off lump sum payment, helping them through this difficult time.

Term life insurance

Term life insurance offers protection for a specific period of time (i.e. the policy term). Term life policies are usually cheaper than other types of life insurance, but they generally do not offer any cash value. 

A term policy will pay out a lump sum, providing you die within the policy term. If not, the policy simply just expires and you won't receive any money back from the premiums you've already paid to your chosen insurer.

Both types of policies are worth considering purchasing, depending on your situation. For example, if you have dependents who rely on your income, then you may wish to opt for term life insurance. If you want to leave a legacy for your family and do not want to restrict your cover to a fixed term or period of time, then whole life insurance might be  better.

You can also get a joint life insurance policy. This provides cover for two people under a single policy. Many couples opt for joint cover as it can work out cheaper than buying separate policies and some find having one policy easier to manage than having two!

Which type is best?

There isn’t a single answer to this question. Each person has unique circumstances, so you should consider your personal goals and preferences before choosing a plan.

Some people prefer term insurance, as premiums are typically cheaper and the term can be tailored to specific financial obligations or goals (such as until individuals anticipate not having financial dependents, or over the term of their mortgage). Others prefer the peace of mind that is offered with whole life insurance.

So while one type of life cover may be the best choice for one family, the same won't apply to others. Whatever your situation, talk to a professional who can help you decide which kind of coverage is best for you.

At Cavendish Online, we can provide expert knowledge and guidance on which type of cover is best for you and your family. Learn more about how our advisors can help.

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When is the best time to buy life insurance?

Buying life insurance at an early age means you'll get a lower premium rate. However, you may not have a family or dependants, in which case you may not need to take out a policy. The amount of cover you need depends on many factors, including:

  • Your lifestyle

  • How much you earn

  • Whether or not you have children

  • The cost of living where you live

  • Your monthly income/outgoings

  • How much money you owe in debts/loans

As you get older, the cost of life insurance rises, so it may make sense to buy sooner rather than later for the best premium rates. Another factor that can affect the cost of cover is your health.

Even if you are older, you may be able to find affordable premiums if you're in good health. However, if you have any medical conditions, you may  pay more for cover, as insurance providers will need to charge a higher premium to account for a higher level of risk.

Where can I find the best life insurance quotes?

If you are thinking about buying life insurance, speak to a specialist advisory broker like Cavendish Online. Our priority is to help our customers find the best life insurance quotes with affordable rates from the UK's leading life insurance companies.

Our advisors can discuss all your options and help you find the right solution for you. If you know what type of policy you want and are generally in good health, you can apply for an online quote today.

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