Life insurance pays a lump sum, or in some cases a regular income, to the people you choose if you die during the term of the policy. It sounds simple, and in many ways it is, but working out how much cover you need, and which type of policy fits your situation, is where good advice makes the difference.
We’ll walk through your mortgage, your dependants, your existing cover and your budget, then search the market for a policy that fits, rather than steering you towards whatever pays the biggest commission. There isn’t one right answer for everyone, and we won’t pretend otherwise.
A common worry is that life insurance is hard to claim on. In reality, Aviva paid out on 98.8% of individual life claims in 2024, and across the industry insurers paid a record £8 billion in combined protection claims that year, according to the Association of British Insurers. Despite this, only around 37% of UK adults actually hold life insurance, meaning most families are more exposed than they realise.
The sum assured stays the same throughout the policy term, and premiums are usually fixed too. This is a common choice for covering interest only mortgages or providing a fixed lump sum for dependants.
The sum assured reduces over time, broadly in line with a repayment mortgage balance. Premiums are typically lower than level term cover, since the amount the insurer might have to pay out falls each year.
Cover that runs for your entire life rather than a fixed term, provided premiums are maintained. It’s often used for inheritance tax planning or to cover funeral costs, and tends to cost more than term insurance because a payout is effectively guaranteed at some point.
Rather than a lump sum, this pays a regular income to your family for the remainder of the policy term if you die. It can work out more affordable than an equivalent lump sum policy, and some families find a monthly income easier to manage than a large sum arriving all at once.
| Policy Type | Payout Style | Typical Use Case | Cost Trend |
|---|---|---|---|
| Level Term | Fixed lump sum | Interest only mortgages, fixed financial commitments | Stable premiums |
| Decreasing Term | Reducing lump sum | Repayment mortgages | Lower average cost |
| Whole of Life | Guaranteed lump sum, no end date | Inheritance planning, funeral costs | Higher average cost |
| Family Income Benefit | Regular income | Ongoing family living costs | Often lower than equivalent lump sum |
Maria is a single mother with a five year old daughter and a repayment mortgage. She wanted enough cover so her daughter could stay in the family home if something happened to her, without the pressure of the mortgage. We arranged a decreasing term policy matched to her mortgage term, plus a smaller level term policy to cover childcare and living costs, giving her a layered approach rather than a single blunt figure.
Two partners running a small manufacturing business wanted cover in case either of them died unexpectedly, so the surviving partner could buy out the deceased partner’s share without financial strain on the business. We arranged life insurance written in trust for this exact purpose, alongside guidance on how the payout would be structured.
It depends on your mortgage balance, other debts, income replacement needs, and how long you’d want that support to last. We’ll work through a proper calculation with you rather than guessing at a round number.
No. Life insurance pays out on death, while critical illness cover pays out on diagnosis of a serious illness covered by the policy. Many people choose to combine both.
Most policies cover death from any cause, though there are typically exclusions for suicide within the first twelve months and for non disclosure of relevant health information at application. We’ll explain any exclusions clearly before you commit.
Writing a policy in trust can help the payout reach your chosen beneficiaries faster and outside of your estate for inheritance tax purposes. It’s straightforward to set up and we can talk you through it.
