What is Life Insurance?
Life Insurance is a way to safeguard your family’s financial future in the event of your unexpected passing. By paying regular premiums, you guarantee a payout to your loved ones, helping them manage essential expenses such as:
- Mortgage or rent payments
- Everyday living costs
- Children’s education
- Outstanding debts
Life insurance is particularly important if someone relies on your income or you share long-term financial commitments. It helps ensure your loved ones can remain financially stable without needing to make immediate, difficult decisions during an already emotional time.
Types of Life Insurance
The type of life insurance you need will depend on your personal and financial circumstances, as well as your budget.
At Cover Direct, we can arrange the following life insurance options:
- Level Term Life Insurance:This policy ensures that if you pass away during the term, your dependents will receive a fixed sum. It’s an excellent way to provide for your family’s future, maintaining their lifestyle without financial disruption.Level term life insurance is one of the most common choices for families, particularly where income replacement or long-term financial security is needed.
- Decreasing Term Life Insurance: Ideal for covering debts that decrease over time, like a mortgage. The payout decreases over the term, reflecting the reducing debt, ensuring your family won’t bear the financial burden of ongoing repayments.
- Whole of Life Insurance:Unlike term insurance, whole of life covers you for your entire life, guaranteeing that your beneficiaries receive a payout no matter when you pass away. It’s a way to leave a legacy or ensure your family’s financial security permanently.Whole of life insurance is commonly used to cover funeral costs or for estate planning, but it isn’t suitable for everyone. An adviser can help you decide if the long-term cost represents good value for your needs.
"It's the sad reality that a child loses a parent every 20 minutes in the UK. Life insurance is the bedrock of a secure financial plan for your family."
~ Jen, Cover Direct
~ Jen, Cover Direct
- Application: Complete the application process, which involves answering health and lifestyle-related questions. Your personal circumstances will influence the cost of your policy.
- Choose a Policy: Decide on the type of life insurance and select the duration and amount of coverage that aligns with your needs and goals.
- Premium Payments: Once your policy is in place, you will need to make regular monthly premium payments for the entire policy term. Failure to make these payments will result in the termination of your coverage.
- Claim Process: In the unfortunate event of your passing during the policy term, your loved ones can file a claim to receive a cash lump sum payment. The amount paid out will depend on the type of policy and the amount of coverage you have secured.
Most life insurance claims in the UK are straightforward, with insurers paying valid claims once the required documentation — such as a death certificate — is received. On average, claims are paid within around one month.
No-Obligation
Our advice is completely FREE with no obligation to buy.
Independent
We’re not biased towards any one insurer. We just recommend the right policy.
Online or Offline
Start online in your own time, then Book a Call.
How Much Life Insurance Do I Need?
The amount of life insurance you need depends on several factors:
- Debts and Mortgages: Enough to cover your outstanding debts, including your mortgage. The average mortgage debt in the UK is approximately £129,130 (source: Finder UK).
- Living Costs: To replace your income for dependents to maintain their lifestyle. The average cost of raising a child until the age of 18 in the UK is estimated at £166,000 for couples (source: CPAG)
- Education: If applicable, include the cost of your children’s education.
- End of Life Expenses: Cover any potential medical bills or funeral costs.
Our advisers help you calculate cover based on your real-world situation, not generic formulas — taking into account future plans, inflation, and existing benefits such as employer life cover.
How Much Does Life Insurance Cost on Average?
The average cost of life insurance varies based on factors such as age, health, lifestyle, and the level of coverage. However, typically, the average monthly premium for life insurance is £34.43 per month in the UK according to comprehensive industry research analysing 121,561 UK term life insurance policies.
Many people pay significantly less than the average, especially when taking cover at a younger age or for a defined term rather than whole-of-life cover.
Things that affect the cost of your cover:
- Your health & lifestyle
- Cover amount
- Occupation
- Your age
Life Insurance vs Other Protection Products
Life insurance is often confused with other types of protection. While they can work together, they cover different risks.
Does Life Insurance Actually Pay Out?
On average 98.3% of life insurance claims in the UK result in a successful payout.
This makes life insurance one of the most reliable financial protection products available, providing reassurance that policies do what they’re designed to do.
Every day people are making life changing decisions.
Read our case studies to understand how we can help with your own circumstances
Common questions about Life Insurance
Yes, you can cancel your life insurance policy at any time. Most policies include a “cooling-off” period, usually 30 days from the start of the policy, during which you can cancel without penalty. If you cancel after this period, you may not receive a refund on premiums paid.
Yes, but it can be more challenging. Some insurers offer specialised policies, or you may qualify for standard coverage with a higher premium or reduced coverage amount. Be transparent about your medical history when applying.
The outcome depends on the type of policy. Term life insurance will usually lapse if premiums stop. With permanent policies, any built-up value may be used to cover premiums for a time before the policy ends.
Probably not. Employer-provided coverage is often a small multiple of your salary and usually ends if you change jobs. A personal life insurance policy provides longer-term certainty.
Generally, life insurance death benefits are not considered taxable income. Our advisers will recommend placing the policy in a trust which is simple and we can do it for you. There can be exceptions in complex estate situations, so you may wish to consult a tax advisor.
Does Life Insurance actually payout? – On average 98.3%* of claims in the UK result in a successful payout.
*https://www.abi.org.uk/news/news-articles/2021/05/record-amount-paid-out-to-help-families-cope-with-bereavement-ill-health-and-injury/
All insurance providers have their own exclusions and conditions. Our expert advisers are experienced in reviewing policy wording and explaining exclusions clearly before you commit.
A claim can be made immediately after you’ve passed away and takes on average around one month to pay out, once the required documentation is provided.
5 star Life Insurance.
We've helped thousands of people find the right cover. Read their stories:
"Amazing"
"Amazing"
"Amazing"
"Amazing"
"Amazing"
"Amazing"
"Very happy"
"Very happy"
"Very happy"
"Very happy"
"Very happy"
