What exactly is life insurance?
In brief, life insurance (also known as life cover or life assurance) will pay out a cash lump sum to your beneficiaries should you die or develop a serious illness while you are covered by your policy.
It’s aimed at minimising the financial impact that your death could, or most likely will have on your family.
Whilst grief can’t be reduced, if you’re the main or sole earner in your household, an insurance pay out could at the very least mitigate the stress that bereavement brings. Your loved ones, whilst coping with their loss, will be able to stay in the family home if they so choose.
You can also add other insurances for an extra premium (see below). Adding these in gives you a “bigger picture” insurance cover.
Confused about life insurance?
You’re not alone. In theory, it’s quite simple but in reality, there are many life insurance providers on the market. And, of course, many distinct policies with diverse criteria – some more stringent than others. Here at Black Lion Insurance, we’re here to help. We aim to educate and inform busy people like you so that you can protect everything that matters in life:
You. You’ll have the peace of mind you need and deserve. You’ll be totally confident that should you die or develop a serious illness, there will be money available for your dependents. Obviously, we’d prefer you to remain hale and hearty for many years to come but taking out a robust insurance policy could be THE best thing you ever did for your family should the worst happen.
Your loved ones. If you’re suddenly not here and you have dependents, say your family and spouse, they’ll have money to live on or cover essential expenses; even settle a mortgage.
The things that matter. Your home and your car, for example. Safety, protection, essential transport. They’ll still be there thanks to a life insurance pay out.
How Life Insurance Policies Work
Basically, a life insurance policy is a contract between you and the provider.
You agree to pay them on a regular basis (your premium) and the insurance company will pay a sum of money if you die. You’ll be able to decide the people who will receive this money. It sounds obvious, but don’t forget actually to tell your beneficiaries that you’ve done this.
Of course, in real life there’s more to it, so choosing the right type of insurance for your life goals and budget may need consideration.
There are no stipulations on how this money has to be spent. So, it could be used to cover your funeral costs, pay off a mortgage or any other outstanding debt.
Generally, your beneficiaries will receive a cheque in a week or two after they submit the claim.
With Black Lion Insurance, we’ll take away the confusion of finding the right cover. With insurance, we work with all the major UK providers and have access to all their policies. And, we have good relationships with each of them, meaning that we can negotiate hard on your behalf.
Life Insurance Covers…
Death. Should you die, your loved ones will receive a lump sum (or some insurers will pay monthly over a longer period).
Critical Illness. For an extra premium, this cover provides protection against serious illnesses or medical conditions. Be careful about this one, though, as plans can vary. Some insurers provide cover for many, many more illnesses than others.
Terminal Illness. Several life insurance plans will pay out early if you are diagnosed with a terminal illness and you have less than 12 months to live.
Life Insurance Pricing. How Much Will I pay?
Sorry, but this could be a how-long-is-a-piece-of-string answer, not least because there are so many variables. But, simply defined, the younger and healthier you are, and the lower-risk your lifestyle is, then your premiums will be lower – in general.
The following five things are essential to consider:
- How long you want your policy to last
- The sum you wish to insure your life for
- Whether you smoke
- How healthy you are at the time of taking out your policy and if you have any pre-existing conditions
- The sort of life insurance policy you decide to take out. (We’ll cover Level Term, Decreasing Term, Family Income Benefit and Whole of Life Assurance below)
So, delving down a bit deeper. Other things taken into consideration will be:
- Your age and gender
- Whether you smoke
- Your medical and family history
- Dangerous hobbies, such as rock climbing, scuba diving…
- Planned travel to dangerous places in the world
With smoking, for obvious reasons, your premiums are likely to be considerably higher. Now could be the time to give up, of course.
By the way, if you develop a medical condition (or even start smoking) after you’ve taken out the policy, you’re not obliged to inform your insurance company; that is, new health problems won’t change your premiums.
Do I Really Need Life Insurance?
It’s hard to give a definitive answer.
In our opinion, and counter-intuitively in view of what we offer, not everyone needs life insurance. Everything depends on your particular life circumstances and we would never recommend something that you don’t need. You may have made provision as part of your employment contract, for example.
However, many people buy life insurance when they take on a mortgage, to ensure that this debt would be repaid if they die.
You may wish actively to consider life insurance when they start a family. This type of cover will protect your dependents from a financial point of view. How would your family cope if you weren’t around anymore?
The facts and figures can be startling. For example, did you know that at the age of 50, you have a 1 in 23 chance of dying over the next 10 years?
The Different Types of Life Insurance. Your Easy Guide
Level Life Insurance
Select a level and length of cover and the insurer will pay out if you die during the lifetime of your policy. This type of insurance is commonly used with interest-only mortgages.
Decreasing Life Insurance
You select the length of your policy, and the level of cover will decrease over time, in line with your mortgage repayments. This is a useful and cost-effective type of cover for a repayment mortgage and the monthly premiums tend to be lower than for a level life policy.
Whole of Life Insurance
There is no expiry of this policy after an agreed term. As it sounds, it covers you from when you take out the policy until you die – assuming, of course, that you keep paying your premiums.
This type of insurance can be more expensive, and pay-outs are often used to cover funeral costs or inheritance tax bills.
Single vs. Joint Life Insurance
A joint policy will cover you and your partner. If you share a mortgage and the financial responsibility of children, a joint policy could work for you. However, as a joint policy only pays out once, the surviving partner will not be covered if they die at a later date.
You may wish to consider two single policies as this would guarantee separate pay outs.
Critical Illness Cover
You may find that critical illness cover is included with most life insurance plans, or it can be added.
CI will pay out if you are diagnosed with a serious illness. The monthly premiums are likely to be higher not least because getting ill is more likely than dying during the lifetime if your policy.
Compare Top UK Insurers
Compare Life Insurance Providers
These are the top 10 UK Life Insurance Providers. We’ve drawn together the highlights of each of them to give you an idea of what you may need. Click on a specific link to read more about each company.
Or, why not give the team here at Black Lion Insurance a call on 0203 011 00 22?
Aegon offers a number of benefits in its life insurance policy at no extra charge, including access to Health Assured, a health and wellbeing helpline; also, an advance payment of £10,000 which can be paid before completion of probate to a funeral director.
AIG has a “Best Doctors” service, enabling its policy holders to access medical advice.
You’ll be able to take out policies on behalf of other people, not just your spouse; also included is family income benefit, which divides your pay out to offer regular, longer-term support to your nominees.
This insurer offers a comprehensive range of additional and optional benefits. It’s worth nothing that terminal illness cover is included at no extra cost.
Additionally, if you buy your policy through Black Lion Insurance, you’ll have access free of charge to their Support Plus service, which offers counselling and a doctor’s second opinion.
Terminal illness cover is included automatically. Also, your policy will include Waiver of Premium for free, as well as cover for redundancy and paternity leave.
With Guardian, you’ll have access too Guardian Anytime and Halo, both of which offer medical support and advice.
LEGAL & GENERAL
L&G is one of the UK’s top providers of life insurance. It offers guaranteed or reviewable premiums with unlimited cover.
If you take a joint life policy, Legal & General will allow you to separate them upon divorce or dissolution of a civil partnership.
With LV, you can also take out critical illness cover that includes CI for your children. LV offers a number of additional benefits, including a Health and Wellbeing line, a Doctors service and overseas cover.
Founded in 1861, Royal London consolidated all its brands, including Bright Grey and Scottish Provident.
Royal London’s life cover policies are guaranteed, which means that your premiums won’t increase over time if your cover stays the same. They also offer family income benefit, a premium waiver and additional benefits such as access to legal services to help you write your will.
Owned by Discovery Holdings and in a joint venture with PruHealth and PruProtect, Vitality is new to the insurance marketplace.
Founded in 2007, Vitality provides incentives and rewards for those in their Vitality Optimiser programme, a fitness and wellbeing package. With engagement, customers could qualify for premium discounts, fitness trackers and cinema tickets.
This insurer offers term life insurance and whole of life insurance.
Zurich is a key player in the world of insurance, with locations in more than 170 countries worldwide. Zurich offers general insurance, life insurance, pensions, savings and investments.
If you meet certain conditions, with their Level Protection Plan you can convert some or all of your Life Insurance to Whole of Life Cover at the end of your policy term.
The Benefits of Buying Life Insurance Through Black Lion Insurance
Comparison sites may not be your best option. In our opinion, these can be fairly generic so if you want something tailored to you, coming to us could be your best ever idea.
- Did you know that when it comes to insurance, we’re whole of market consultants? This means that everything we do is about finding the right provider for you, and you alone. Our team has specialist expertise. And we’re impartial. A great combination, we think.
- There’s no fee for our services and you don’t pay us a penny. We earn our commission from the insurance provider, and there’s absolutely no hassle or hard sell.
- We have bargaining power with the insurance providers. We’ll negotiate the right premiums for you that we possibly can – possibly this could be much cheap than contacting an insurer directly yourself.
- Black Lion Insurance is fully regulated. This means that you’re protected, as we’re responsible for the policy we set up for you.
Don’t forget: if you need to make a claim, or if your family does, we can take care of everything to ensure that the pay out is made as soon as possible.
What our clients are saying
Part of Halo Consulting, Black Lion Insurance are a dedicated team of insurance consultants with years of experience in guiding our clients to a solution that meets their specific needs. We specialise in helping both employed and self employed individuals, as well as business owners on a variety of solutions, which range from life insurance, income protection insurance, keyman insurance and shareholder protection insurance.