Term Assurance & Whole of Life Cover What is life insurance?

Life Insurance

Life Insurance is the simplest, popular and best way to ensure your family is taken care of in the event of your death. This type of policy is designed to pay out a cash lump sum of money on death during the term of the policy, and this can be used to pay off your mortgage or provide for your family’s future to pay for things like mortgage payments, bills, summer holidays, university fees or weddings.

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There any many factors to consider when purchasing life insurance and it can seem quite a daunting task. Our dedicated insurance brokers at Prime Financial Solutions & Mortgages will deal with you directly from the first enquiry through to your application being completed, ensuring you are in control of the process from start to finish.

Our service is totally secure, allowing you to research, compare and buy the right life insurance cover for you.

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Types of Life Insurance

There are three main types of Term Life Insurance that need to be considered – level, decreasing, and whole of life / increasing term insurance. Often, it is best to have a combination of these insurances to improve the cover. Level term and decreasing policies are taken over a specific time period and are generally the cheapest and simplest form of life assurance.

  • A Level Term Policy will pay the same lump sum amount upon death no matter when this occurs during your policy. Therefor if you die on the first day of the policy, you get exactly the same sum as you would if you died near the end of the policy. Throughout, the sum you are compensated for remains equal-hence the name.
  • A Decreasing Term Policy on the other hand will pay out more at the beginning of the policy than it would at the end. As the sum assured reduces through the term and is more commonly used to cover a repayment mortgage. often used to cover a debt that shrinks over time, such as mortgage repayments.
  • Whole of Life insurance is different from term assurance as it will pay the sum assured on death regardless of what age that occurs. Whole of Life Cover will generally cost more than term assurance as you will be covered until you die. Your family can make the most of a payout should an insurance claim be made.

Level term and decreasing policies are taken over a specific time period and are generally the cheapest and simplest form of life assurance.

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How a Life Insurance Policy Pays Out

The way a term policy pays out can also come in one of two ways. Those that pay out a lump sum on death and those that pay an income to the end of the term, known as Family Income Benefit. As usual there are pros and cons to both, a lump sum policy can be more flexible because it allows your family to have a lump sum upon your death for them to invest or use as they wish.

A family income policy on the other hand is often cheaper because the liability is always decreasing for the insurer. For example, if you die in the 18th year of a 20 year policy, the insurers would only have to pay income for two years. It’s also easier to work out the level of cover with this type of policy because you simply work out the income you would need to replace.


Life Assurance and Life Insurance – what’s the difference?

They are not the same thing. Life Assurance will cover you for your whole life, and life insurance will cover you for a set term for example you might choose cover for 10 years or 30 years. If you live longer than the fixed term, you would be required to renew the policy for beneficiaries to receive a pay out on your passing. With Life Assurance (Whole of Life policy) you will receive a payout even if you were to die on the day the policy is taken out.

Who Does Life Insurance Cover?

Life insurance policies can be taken as either single or joint policies. Joint policies usually pay when the first person dies leaving the second person without cover. This is usually the way you would have cover on a joint mortgage. An alternative to this is to take out two single policies meaning you are both covered separately with the insurer paying out for both deaths.

3 Types of Life Insurance Premiums

Guaranteed (During the scheme, core premiums remain the same; premiums only increase if you adjust the profit to limit the premium from inflating). Age Banded: As you get older, premiums are usually increased every year, so this rate of increase can be fixed, or it can be checked. Reviewable type of premium: The premiums are periodically checked and raised depending on conditions of the customer and the insurer.

Critical Cover for Illnesses

The insurer will usually set out certain protected serious illnesses. Look for insurers that provide cover for a large number of essential diseases and illnesses. Look for clear descriptions of those illnesses to make sure that you can claim if you ever need to.

Life Insurance Terms – a Summary

There is a variety of products to choose from. The choices you make should be tailored around your circumstances and your needs. You will need a Life Insurance payout that will cover significant costs to your loved ones, such as funeral or remaining mortgage expenses.

Care should be taken regarding revisable premiums and age banding. The longer you have your scheme, the more expensive it can get. Prime offers free professional advice, contact us so we can go through everything with you.

Family Income Benefits

Life Insurance for family income benefits is the type of policy that will cover you for a decrease in the term. However, instead of paying a lump sum at end of life, beneficiaries are paid a regular monthly income until the expiry date of the policy is reached.

Perhaps you are single? Married with children? Maybe you have no children. People are faced with different circumstances and you might think you don’t need any form of life insurance cover. But think seriously about the peace of mind life insurance will bring to you to your loved ones, in the event of the unthinkable happening. There are many short-term benefits as well as long term advantages. Life insurance is a valuable asset for you ‘and’ your family.

Best Life Insurance – a Trusted Reliable Safety Net

Look at Life insurance as an important safety net for families. Make sure you know how to choose the best type to suit your needs and get yourself clued up on the pros & cons and what you should avoid. The most common life insurance is called Term Life Insurance. You pick the amount you want to be insured for and the duration you want to be cover for. This type of policy will pay out to your beneficiaries if you die within the term. If you do not die during the agreed term, the policy won’t pay out and you won’t get any of the premiums back that you paid in.

Life Insurance to Cover Mortgage UK

Searching for the right life insurance can be very time consuming and difficult to understand. Prime Financial Solutions and Mortgages Ltd is an established mortgage broker and Life Insurance provider based in the centre of Wigan, Greater Manchester. We are respected and recognised by the FCA and we can help you to find the best possible solutions in the shortest amount of time. Contact Prime today to book a free consultation.

To find out more you can contact us by email enquiries@primefs.co.uk and by phone 01942 665436 or you can use our quick contact form. You can visit us at Rodney House, King Street, Wigan WN1 1BT. If you would like to complete a quick online application for Life Insurance you can go straight here to get your free quote.

Our trusted life insurance brands:

  • virgin-money
  • santander
  • the-conventry
  • aldermore
  • aldermore
  • aldermore


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