Life insurance is one of those subjects that many people know they should consider but often put off.
Nobody particularly enjoys thinking about what might happen if they were no longer around. However, putting the right protection in place could help ensure that your family is financially supported during an already difficult time.
What is life insurance?
Life insurance is designed to pay a financial benefit when the person covered dies, provided the claim meets the conditions of the policy.
The Association of British Insurers reported that insurers paid £7.84 billion across individual and workplace protection claims during 2025. For individual protection policies, 97.9% of claims were paid, continuing a claims-paid rate of at least 97.9% for more than a decade.
- Repay a mortgage or other debts
- Replace some of the income that would be lost
- Help with household bills and childcare
- Provide support for a spouse or partner
- Pay funeral costs
- Create an inheritance for children
- Protect a business or its owners
Do I need life insurance?
Life insurance may be worth considering when somebody would be financially affected by your death. Even where both partners work, losing one income could make it difficult to maintain mortgage payments, childcare and normal household spending. The need is not limited to the highest earner; replacing the contribution of a stay-at-home parent can also be expensive.
- You have a mortgage
- A partner relies on your income
- You have children or other dependants
- You pay towards childcare or household expenses
- You have loans or other commitments
- You run a business
- You want to leave a financial safety net
How much life insurance do I need?
There is no single figure that is right for everyone. A proper protection review should consider the wider financial picture rather than choosing an arbitrary multiple of salary.
- Your outstanding mortgage and debts
- How much income your family would need each month
- How long support may be required
- Future education or childcare costs
- Savings and investments already available
- Existing workplace cover
- Pension or death-in-service benefits
- The effect of inflation
What types of life insurance are available?
Level term assurance normally keeps the amount of cover fixed. Decreasing term assurance generally reduces over time and is often used with a repayment mortgage. Family income benefit normally pays a regular income for the remainder of the policy term. Whole-of-life cover is designed to remain in place for life, provided premiums continue to be paid.
Should life insurance be written in trust?
In some circumstances, placing a life insurance policy in trust may allow the benefit to be paid to the intended beneficiaries without waiting for probate. It may also help keep the proceeds outside the estate for inheritance-tax purposes. Trusts can have legal and tax consequences, so the arrangement must be completed correctly and remain suitable.
Does life insurance cover existing medical conditions?
A previous illness does not automatically mean cover is unavailable. An insurer may offer standard terms, charge a higher premium, apply an exclusion or decline the application. You should answer all application questions fully and accurately.
- Health and medical history
- Occupation
- Smoking or nicotine use
- Alcohol consumption
- Hobbies and activities
- Height and weight
- Existing insurance
Is life insurance expensive?
The cost depends on age, health, smoking status, occupation, the amount of cover, the policy term and the type of cover selected. Price should not be the only consideration; the policy must provide an appropriate level and type of cover.
Considerations
Life insurance policies have exclusions and limitations. Cover depends on the policy terms and the information supplied during the application.
Protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
Life insurance advice
Chris Hopkins is an Independent Financial Adviser based in Aberdare, helping individuals, families and business owners review their financial protection. As an independent adviser, Chris can assess policies from across the market rather than being restricted to one insurance company.
- Understanding your family and financial circumstances
- Checking existing personal or workplace cover
- Calculating an appropriate level of protection
- Comparing suitable insurers and policy features
- Helping with the application
- Supporting you through underwriting
Frequently asked questions
Can I have more than one life insurance policy?
Yes. Some people have separate policies for different needs, such as one to repay a mortgage and another to provide family income.
Does life insurance pay out for every type of death?
Most policies provide broad cover, but exclusions and conditions apply. Accurate information must be provided during the application.
Is life insurance the same as critical illness cover?
No. Life insurance normally pays following death. Critical illness cover is designed to pay following diagnosis of a qualifying serious illness.
Do I need life insurance if I receive death-in-service cover?
Workplace cover can be valuable, but it may end if you leave the employer. You should also check whether the benefit would be enough.
Can self-employed people arrange life insurance?
Yes. Self-employed people can arrange personal life insurance, and eligible limited-company directors may have access to certain business-funded arrangements.
| Book an initial life insurance appointment
Would your family be financially secure if you were no longer around? Review your existing cover and calculate how much protection may be appropriate. Call: 07368 882092 Email: chris.hopkins@cardiffifa.co.uk BOOK YOUR INITIAL APPOINTMENT |
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