There are a few options out there if you are considering life insurance, and term life insurance is probably going to be the main one you come across. It can be used to cover a variety of things or situations and it is also one of the cheapest plans available on the market.
Let’s first of all recap what life insurance is. Put simply, life insurance is a policy that pays out cash to your family if you happen to die. The two main types of life insurance are term life insurance and whole life insurance.
Learn more about Whole Life insurance.
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. If you have not claimed before the end of your chosen policy term, the policy will end, and no benefit will be paid.
If you are facing financial difficulty, please contact your insurer before cancelling your policy or letting it lapse. They may have options available that means you don't have to lose the plan.
Top tip - you can usually cancel your term life insurance plan at any time with no additional fees. This is a great feature if you find you no longer need it later in life. Once canelled, you will no longer have cover in place.
There are two types of term life insurance plans available to you - level term and decreasing term.
As they usually have different purposes, you may want to consider both options and it's not unusual to have a combination of both set up to protect different things.
Decreasing term life insurance is often referred to as mortgage life insurance as your sum assured gradually decreases over time, roughly in line with a mortgage of the same amount.
Although it is often classed as mortgage insurance, you don’t have to have a mortgage to take the cover out and it could be a good option for someone that may need less cover as time goes on.
One of the main benefits of this policy is that it tends to be cheaper than level term insurance because the payout is decreasing. The actual price difference usually seems small at first, but it’s sure to add up in the long run.
Learn more about decreasing term life insurance.
Level term life insurance is a life insurance policy where the sum assured (the amount you are covered for) stays the same for the entire term of the policy.
Let’s say you purchase a life policy to cover you for £300,000 over 20 years. You will be covered for the full £300,000 whether you were to pass away on day 1 or day 7000.
This kind of policy is often also referred to as family life insurance.
Increasing term life insurance is a life insurance plan that increases with inflation as the term goes on. Usually, this is acheived by including indexation as an add-on to your level term life insurance policy. With an increasing term life insurance policy, you are ensuring that your sum assured has the same cash value as when the policy was started. ]
Learn more about increasing term life insurance.
You may be interested in the following articles:
What is the best life insurance policy for me?
Which type of life insurance is best for families?
What is the best life insurance for couples?
Unfortunately, when it comes to life insurance, there is no one size that fits all. So, whilst we can’t tell you exactly what to do in this article,we can give you some pointers:
Consider how long your mortgage term is
Consider the age of your children and/or other dependents and how long they may need financial support
Consider any debts that may need to be paid off if you pass away
If you feel ready to get started by yourself, you can do so with our online comparison tool.
Or, if you are still unsure how long your life insurance plan should be, and would like a helping hand, then please consider speaking to one of our helpful advisers.
Just like the above question, there is no set answer for everybody. There are a number of different factors that are factored into the cost of your life insurance plan.
Decreasing term life insurance is available as a single life plan or a joint life plan. A single life plan covers one person and would pay out upon death.
A joint plan would cover two people, and would usually pay out upon the first person passing away. There are also joint life plans available that pay out upon the second person’s death instead, but they are generally less common.
Whether you set your policy up as single or joint is ultimately up to you to decide, and you may want to ask yourselves, ‘Would we want two payouts if we both died, or just one?’
An example of where joint life insurance would be helpful:
If you have a joint mortgage, then a joint life, first death policy may be best for you. This is because you would receive payout if one of you were to die, and the survivor could use the money to help pay off the mortgage.
Learn more about joint life insurance.
When you are applying for life insurance, you will be asked a number of questions about your current and past health. It is vital that these questions are answered as honestly and accurately as possible to ensure that your plan is set up correctly.
If you do happen to disclose a medical condition, it may impact the price of your policy or potentially your ability to purchase a policy at that time.
This all comes down to what the condition is and how much it impacts your life.
Failure to disclose the necessary information may impact a claim later on, so the best rule of thumb is to be open and honest.
You can expect to be asked things like:
Have you ever experienced a heart attack?
Have you ever been diagnosed with cancer?
Have you been diagnosed with any mental health conditions?
Have you had raised blood pressure in the last 5 years
Are you currently on any medication?
Are you awaiting any follow ups?
This process is called underwriting.
Learn more about the underwriting process.
If you have a medical disclosure, you may find that seeking advice is the best option. We have a team of friendly, knowledgeable and expert advisers available on
You may also be interested in the following articles:
Does life insurance cover heart attack?
Breast Cancer Awareness Month: Can I get life insurance with a breast cancer disclosure?
Mental health and life insurance - what to expect
If you feel confident to look into term life insurance by yourself, you can get started online.
If you'd like some help deciding which cover to purchase, or if you have medical conditions, a dangerous job or a dangerous hobby, please speak to an expert:
If you are unable to pay your premiums, there are usually a few options available.
For example, if you are struggling to pay your premiums because you’re currently off work ill, and your plan includes waiver of premium, your insurer will cover your premiums for you and you won’t lose the cover.
Alternatively, they may be able to grant you some sort of payment holiday or repayment plan.
It’s important to speak to your insurer before making any decisions about your policy. They will be able to provide more information and advice on what options are available.
Give our advisers a call today.
Our team of friendly and professional advisers are on hand to help with any questions you may have regarding Life Insurance.
The advisers can also make recommendations tailored to your current situation and will research the market on your behalf, ensuring you secure the cover you need and supporting you every step of the way.
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