What Life Insurance Covers: How to Plan for the Future

Life insurance can help protect your loved ones and can cover a host of things such as tuition, bills and mortgages.

Life insurance is great way to make sure your loved ones are taken care of financially if you were pass away. The future is uncertain and purchasing a policy can help to know that you don't have to worry about their financial future. 🙌

What is a life insurance policy?

A life insurance policy is a contract between an individual and a life insurer, where the insurer promises to pay a certain amount of money in exchange for monthly payments by the policyholder, after their death and during a set period of time.

How does life insurance work?

When life insurance policies are taken out, the policyholder pays out monthly premiums to receive a payout for their loved ones. If the monthly payments are not paid, the life cover stops. However, if the policyholder passes away during the term of their policy, the insurance company will pay the amount of cover purchased. 💷

How much life insurance costs

This is really dependent on your personal circumstances. It depends on how much life cover you want to take out and how much you are willing to pay per month, as well as things such as your age, life expectancy, health status and your family medical history.

Most companies will have a place to get a quote on their website, so you can figure out how much it would cost before taking the plunge and getting cover.

You can get your life insurance quote with Bequest here.

What does life insurance cover?

There are various types of life insurance and they can cover various things, depending on the type you choose and what you personally want to use it for.

Overall, life insurance can cover:

  • A mortgage
  • Rent
  • Childcare
  • Household bills
  • Maintaining living standards
  • School tuition
  • University fees
  • Funeral payments

Below are common types of insurance that can be used in various ways.

Term life insurance

Term life cover is a type of life insurance policy that has a predetermined and chosen length of term that you are covered for. If you pass away during that time, your loved ones will receive your payout.

  • This cover can be used for anything you wish, especially those mentioned in the list above

Level

  • Monthly premiums and the payout stay the same throughout your chosen term length
  • This cover can be used for anything your loved ones wish, as the amount does not change, they will know how much payout they will receive and can plan ahead

Decreasing

  • Monthly premiums and payout decrease throughout your term
  • This is commonly used to pay back a mortgage, as it can decrease at the same rate as your mortgage

Increasing

  • Monthly premiums and payout increase throughout your term, normally to cover inflation
  • This type of cover can be used for anything you want, from maintaining living standards, school fees or a mortgage

Whole of life insurance

Whole of life insurance covers you for your entire life and can be used as an investment as you can borrow against or cash out at any time.

Single/joint life insurance

Single life cover protects one individual on one policy. Joint life cover protects two individuals on one policy.

When you purchase separate policies, you pay almost the exact amount each month in life insurance premiums, but you are able to keep your policy if your partner passes away. Your loved ones will also receive double the payout should you both pass away.

Life insurance to cover your mortgage 🏠

When you're looking to purchase a home, a common next step is to buy life insurance. A home is a major purchase and the mortgage payments might not be able to be paid if the owner passes away.

With joint mortgage debt, the other person automatically takes on the debt when someone passes away. This can be stressful both emotionally and financially, and this is where life insurance does it's job! However, if there is no joint mortgage debt, life insurance can still help so your loved ones can stay in the family home and not uproot their lives unnecessarily.

Here's how a life insurance policy helps your family

As mentioned, life insurance is an incredible way to support your family and loved ones when you're no longer around. This means they don't have to worry about financial protection when they should be mourning your loss. 👊

Side note: you can purchase multiple life insurance policies if want more coverage or want policies with various insurers.

Life cover can provide financial support for your children

Children, especially those who are under 18 and still financially dependent on you, will most likely need some financial support after you pass.

Life insurance can help pay for school fees, extra-curricular activities, university tuition and anything else that you may want to help them with.

Critical illness cover helps if you become seriously unwell

Critical illness cover can be added to a life insurance policy or can be purchased separately. Critical cover pays out if you are diagnosed with an illness that is on your insurers predetermined list, this usually includes illnesses such as some cancers, strokes and heart attacks.

A lump sum can pay off a repayment mortgage

As mentioned above, depending on the type of life insurance policy you purchase, you will have a lump sum to cover the rest of your mortgage, with decreasing term life cover, or to cover the mortgage as well as whatever else your loved ones need. This can be a huge help at such an uncertain time.

Life cover can support your partner

Married or not, your partner will have finances that need to be covered. These can include a possible mortgage or rent, household bills and continuing in the lifestyle they are used to. A lump sum life insurance can be a great help when they want to stay in the apartment or even pay for your funeral. 💏

What things do life insurance policies not cover?

Life policies do not cover a few things, however, these can be different from insurer to insurer. It's important to read the fine print and ask questions when you are uncertain so you can become aware of the restrictions to your cover and life insurance claim.

What's not normally covered ðŸšŦ

  • After your term has ended
  • Fraud and dishonesty
  • Suicide (to learn more, read the next section)
  • Stopped payments
  • Illegal activity

Does life insurance cover suicide?

This varies from insurance company to insurance company. However, most companies will cover suicide if it has been at least 12 months since the policy was purchased. Looking at the suicide clause in the terms and conditions of a policy before purchasing will help you determine if it is covered or not.

At Bequest, we know that mental health is such an important aspect to overall health and does not have a linear path. It is commonly misunderstood and because of this, we do not have a suicide clause.

Life insurance helps plan for the future

No matter what you or your loved ones choose to use your life insurance to pay for, you will know that your they are taken care of and their financial future is protected.

If you have questions about purchasing life insurance, email us alexa@bequest.com - we would love to help. 💛

Instagram icon

Safeguard your loved one's future and get your cover today! ðŸĪš Apply for Bequest Life

teal shape

FF Bequest Limited, trading as Bequest, is authorised and regulated by the Financial Conduct Authority with firm reference number 923791. You can check our authorisation on the FCA Financial Services Register by visiting the following website: register.fca.org.uk . We are registered in England and Wales, Registered office address: Founders Factory, Northcliffe House, London, United Kingdom, W8 5EH. Company Number 12367897.

Regulated by the Information Commissioner's Office (ICO) [ZA662891]. "Bequest" is trademark protected by FF Bequest Limited (UK00003452648). FF Bequest Limited is registered in England and Wales, No 12367897.

0203 916 5433

FF Bequest Limited, trading as Bequest, is authorised and regulated by the Financial Conduct Authority with firm reference number 923791. You can check our authorisation on the FCA Financial Services Register by visiting the following website: register.fca.org.uk . We are registered in England and Wales, Registered office address: Founders Factory, Northcliffe House, London, United Kingdom, W8 5EH. Company Number 12367897.

Regulated by the Information Commissioner's Office (ICO) [ZA662891]. "Bequest" is trademark protected by FF Bequest Limited (UK00003452648). FF Bequest Limited is registered in England and Wales, No 12367897.

Privacy policy
Terms of Use
Complaints
Cookies