Life Cover Insurance
What is life cover insurance?
Life cover insurance is a form of insurance product that will provide a lump sum payment to the family of a customer who loses their life, whilst the policy is still valid.
There are two main different types of life cover insurance. The two different types of life cover insurance are term life cover insurance and whole life cover insurance.
Term life cover insurance
Term life cover insurance provides customers with life insurance over a set term. Term life cover insurance is most commonly offered with a mortgage, but is designed for people with financial responsibilities that they wish to be protected should the worst happen to them.
The term of a term life cover insurance policy will vary from policy to policy, but is generally the length of a mortgage, and is rarely offered to customers to end past their 60th or 70th birthdays.
If a customer was to die during the term of their insurance, then their family will receive a payout. If the customer lives beyond the end of the term of their life insurance policy, then the customer will no longer be in line for a payout when they die. For customers wanting a policy which pays out whenever they die, then whole life cover insurance will be for you.
Because the majority of people in the UK live past their 60th birthdays, term life insurance is generally a cheap life insurance product, and costs around eight times less than whole life cover insurance.
Whole life cover insurance
Whole life cover insurance works in the same way as term life insurance with regards to a payment term, but offers a customer a payout whenever they die, at whatever age, for their whole life.
Whole life cover insurance is more expensive because the insurance company know they will have to pay out to every single different customer, and that they will need to recoup at least the cost of the payout in premium payments to make any profit at all.
Whole life cover insurance customers can also start to borrow money later in their policy against their final payout, when they have less need for the pay out for their family. They can then use the money themselves, or distribute it to their family, and enjoy watching the benefits that money could bring.