How to choose Life Insurance
If you’ve recently decided to look into finding the right Life Insurance cover; congratulations. You’ve taken the first positive step towards protecting yourself and your loved ones from the worst of life’s mishaps.
However, this can be a complex industry, and even the best-intentioned people can get disoriented by the choices available to them. That’s why at Beagle Street, we keep a strong focus on making Life Insurance accessible and understandable to anyone who thinks they might need cover.
Here, we break down the most common forms of Life Insurance, and suggest the circumstances where they might be appropriate.
Who needs to get Life Insurance?
Life Insurance is all about financially protecting those who depend on you, so the first thing to consider is exactly who has the most need to get insured? Insuring just one person (a single life policy) or both people (a joint life policy) is a decision affected by things like:
- Cost – Joint Life Insurance is obviously going to be more expensive than cover for one person, but it will usually be cheaper than two single life policies.
- Circumstances – Would the impact of one death be greater than the other? Even two people in similar situations can have differing insurance needs.
- Medical conditions – One partner with a diagnosed condition can drive up the cost of a joint life policy significantly.
- Existing cover – Does one partner already have Life Insurance through work or with their mortgage? This could make Single Life Insurance a better option.
What types of Life Insurance are there?
Above and beyond deciding who is getting covered, you need to decide what the cover will protect against, and how long it’s going to run for. This will dictate the type of policy that’s best for your circumstances.
Beagle Street offer both Term Life Insurance and Decreasing Term Life Insurance:
Term Life Insurance
Term Life Insurance is a very straightforward setup. You set a term during which you’re covered, say 20 years for example, along with a sum insured. If you die during that term, the pre-agreed amount pays out.
This type of insurance is easy to get your head around. It can be set up to cover the costs of most common living arrangements, and premiums tend to be affordable for those with the most common need for Life Insurance. It typically covers fixed sums like the outstanding capital on an interest-only mortgage, or providing a cash sum upfront to financially support your loved ones.
Decreasing Term Life Insurance
As above, this insurance lasts for a pre-agreed term. Where it differs is that the amount of payout goes down each year. This is because it’s designed to cover one major expenditure, usually a mortgage which is paid off over time, so obviously you wouldn’t need the same payout towards the end of the mortgage as you would in the early years.
Because the amount paid decreases with time, premiums are usually cheaper than Term Life Insurance premiums. If your dependants would struggle to cover the mortgage if you died, but their other expenses are under control, this could be a good option.
Family Income Benefit Insurance or Whole of Life Insurance are also available, but please be aware that Beagle Street don’t offer these:
Family Income Benefit Insurance
The above two types of insurance pay out a lump sum if you die. This type pays out a steady income, which is triggered by your death. This can be agreed to cover the income of a household’s main breadwinner, and would pay out the same amount each month until the term of the policy expires.
If it’s the loss of your salary that would cause the greatest financial impact on your dependants, rather than any more permanent assets, this is a good choice of Life Insurance to keep them covered in the long run. Premiums tend to be very similar to Term Life Insurance.
Whole of Life Insurance
As the name suggests, this type of insurance covers you for the rest of your life, as long as you keep paying the premiums.
Premiums tend to be higher than other types, but over a long enough period they work out cheaper overall than having to re-assess and set up new policies as they expire when you are older each time. Savings options can also be built into this type of cover, making it a tax-efficient way to cover your funeral and plan your estate.
Life Insurance from Beagle Street
Get in touch with our impartial, expert team who’ll be able to help you through your Beagle Street quote. Alternatively, to find out how much Life Insurance from Beagle Street could cost you, use our online Life Insurance quote tool.
