Life Insurance in Leeds

Different Types of Life Insurance in Leeds

When it comes to Life Insurance policies, there is quite a lot to understand and choose from. As an open & honest Insurance Broker in Leeds, here are the most common policies that we come across:

Level Term Life Insurance

If you decide to take out Level Term Life Insurance, there will still be a payout, however, it will only be released if you die during your policies fixed ‘term’. These types of policy tend the last anywhere between 5-25 years, in 5-year increments.

Term Life Insurance is usually used by homeowners to pay off their mortgage, keeping their terms in line with each other. If they have a 25 year mortgage, their Term Life Insurance will follow. This means that if you were to die whilst owing an outstanding mortgage amount, your policy will cover those payments, rather than it falling to remaining family members.

Decreasing Term Life Insurance

As an open & honest Insurance Broker in Leeds, this is possibly the most popular type of Life Insurance policy we encounter.

Your initial line of thought may be “why would you take out a policy that is going to decrease in value?”. This policy is actually more targeted at homeowners with repayment mortgages, which is the majority of people with a mortgage. This policy typically is able to pay off your mortgage balance if you don’t manage to do so once you die.

The policy will actually mirror the value of the outstanding mortgage balance. As your mortgage balance decreases, so too will the sum insured.

Depending on your personal circumstances, decreasing Life Insurance will generally be taken out with other Insurance products. It is because of this that we will always recommend speaking to a Mortgage & Protection Specialist in Leeds, as we can help to advise on the right insurance route for you to take.

Increasing Term Life Insurance

This type of Life Insurance policy will still payout if you die within your fixed term. It works in the opposite way to Decreasing Term Life Policy.

The difference with Increasing Term Life Insurance is that the amount that you are covered for increases as your term goes on. It will increase by a fixed amount until your policy term ends.

This type of Life Insurance was introduced to protect the policy’s total value against inflation and is usually in line with the retail price index.

Whole of Life Insurance

During our time as both a Mortgage & Insurance Broker in Leeds, we’ve learnt that the Whole of Life Insurance policy is not always the go-to for people looking at insurance, though it is still viable and may just be the perfect policy for you to take out.

The Whole of Life policy works just like the name suggests; It will last for your whole life. When you die, a payout will be made from your policy. Whole of Life Insurance will be quite a bit more costly than Level Term Life Insurance, though it isn’t a fixed term; you’re covered for your whole life.

If you have been able to keep up your life insurance payments, your policy will last your whole life. We find that the uses for this type of insurance tend to be for family protection or a part of inheritance tax planning.

Joint Life Insurance

If you are in a married or cohabiting with someone, you may possibly consider a Joint Life Insurance policy. This type of policy will pay out if either of you die. It is still possible to have two separate Life Insurance policies if you so desire, though a Joint Life Insurance policy will generally be more cost-effective than two individual ones.

The policy will only pay out if one of you dies, and then it will end, not carrying on to cove the remaining person. This may seem like a point against this type of policy, but it comes in very handy if you took out a mortgage with your other half, and they’re potentially going to be left with the remaining payments.

Death in Service

This type of Life Insurance cover, depending on your career of choice, may be offered to you by your employer. The company you work for is under no obligation to provide Death in Service cover, though for those who do, it may be offered as a part of their employee benefits package.

Death in Service tends to be a lump sum payment in cash, that is paid out to an employee’s family or somebody of their choice if they happen to die. This sum, depending on employer, can be up to 5 times their annual salary. There are no restrictions on what can be done with the employees money.

The payout is completely unrelated to if an employee dies in the workplace.

Taking out Life Insurance as a Single Homeowner

Even if you are a single homeowner, you definitely shouldn’t just disregard all Life Insurance options.

If you have moved into a new home and are currently living by yourself, without any children or a partner, you may actually just forget about Life Insurance. It’s quite common to do so. There are some who also choose to ignore it, as it may not apply to their circumstances at all.

It is important to future proof yourself though. What if your circumstances were to change and then you were to die? That Life Insurance policy could be essential to protecting your future.

Get in touch with a Mortgage Protection and Insurance Specialist in Leeds to learn more about why having Life Insurance as a single homeowner could benefit you.