WHAT LIFE INSURANCE IS RIGHT FOR ME?

How long do you need life cover for?

Cover until you die

• Whole of Life Insurance: Pays out no matter how old you are when you die.
• Term Life Insurance: Only pays if you die during the policy’s term, which can be 1 to 40 years.

Cover while you have a mortgage

• Decreasing Term Life Insurance: The payout gets smaller over time, matching your mortgage repayments.
• Fixed Term Life Policy: The payout stays the same throughout the term, letting you pay off the mortgage and give the rest to your family.

Cover when you are older

• Life insurance gets pricier as you age, so it’s good to look around early.

• If Over 50 and Healthy: Term or whole life policies are options, but they get more expensive the longer you wait.
• If Over 50 with Health Issues: You might get term or whole life insurance, but there’ll be fewer choices and higher costs.
• Over 50s Life Insurance: Accepts everyone, no matter their health, and offers a fixed payout. But, you might pay more in than what gets paid out if you live a long time.

What kind of payout do you want?

There are two ways your family can get money from life insurance, depending on what kind of policy you choose:

• A Lump Sum: This is a big amount of money all at once. It can be used to pay off your house or give your family a bunch of money to use.
• An Income: This is smaller, regular payments that can help your family with their monthly costs like house payments or rent. But remember, these payments usually stop when the policy ends.

For a whole of life or an over 50s life insurance policy, you usually get a lump sum. But with a term life insurance policy, you might have both options to choose from.

Which payout is right for me?

How much money your family gets from life insurance depends on when you pass away:

• If You Die Just Before the Policy Ends: With an income payout, your family gets monthly payments only for the few months left. But with a lump sum, they get all the money at once, no matter how close to the end you are.
• If You Die Early in the Policy: With an income payout, your family gets monthly payments for the remaining years, which helps over time. But if it’s a lump sum, they get all the money right away, which might be more than what you paid in premiums.

Life policy pros and cons

Pros of term life insurance

• Can match up with your mortgage.
• Your payments stay the same during the policy.
• More options for how you get paid.

Cons of term life insurance

• Only pays if you die during the policy’s term.
• If you have a policy where cover decreases, the payout gets smaller over time.
• Inflation can make the payout worth less over time.
• Doesn’t cover every reason for death.

Pros of whole life insurance

• Pays out no matter when you die.
• No age limit for making a claim.

Cons of whole of life insurance

• Doesn’t cover every reason for death.
• Sometimes you pay more than what gets paid out.

Pros of over 50s life insurance

• Everyone over 50 gets accepted.
• You can pay small premiums.

Cons of over 50s life insurance

• Sometimes you pay more than what gets paid out.
• If you miss payments, you lose any money you’ve paid in.
• Only for people 50 and older.