It is an insurance policy that pays out a lump sum to your loved ones when you die.
You can get a quote for life insurance online, or by speaking to a specialist adviser over the phone or in person.
How does life insurance work?
You have to pay a premium each month until the end of your policy's term, e.g. 20 years. You are only eligible for a payout if you die during the term of your policy.
However, a life assurance policy does not have a fixed term, and is designed to pay out whenever in your life you pass away.
How to choose the right life insurance
To get the best life insurance policy, you need to consider:
The amount of cover you need: This is how much an insurer will pay out to your loved ones when you die. The more cover you get, the higher your premiums will be.
The length of cover you want: This is how long you want the policy to last, e.g. 30 years. If you die outside of this term, you will not get a payout.
Once you work out what type of cover you need, get quotes to find the best price online.
Choose an amount of cover
Work out how much cover you need by deciding if you need the insurance policy to:
Pay off your mortgage if you die
Give financial support to your family when you are no longer around
Most life insurance companies let you choose an amount of cover that goes above any amount you need, like £10 million.
Choose a length of cover
Once you know how much cover you need, you can decide how long you need it for:
If you want life insurance to pay off your mortgage, you could choose a term that matches how long it will take to completely pay your mortgage off.
If you want insurance to support your family, you could choose a term that matches when your children are old enough to move out on their own.