Well the clue is in the name – you are insuring your life much in the same way you would a car or your home; so if anything happens to you, your family are financially compensated. Essentially you pay an insurance provider a recurring fee or ‘premium’, usually monthly, for a set term depending on the length of your policy.
A multitude of factors, primarily the cost of your policy, will affect the amount paid out should the unforeseen happen during the term of your agreement. The payout will usually be in the form of a lump sum. Hopefully you will now have a clearer idea of what you are buying when searching for a life insurance quote online.
Life insurance in not to be confused with ‘decreasing term assurance’ or ‘life assurance’. This may seem straightforward but there are several terms you may come across when searching for a life insurance policy that may serve to complicate things. When looking for a life insurance quote online do not confuse it with ‘decreasing term assurance’. This is purchased primarily to cover mortgage repayments and decreases over time as your mortgage shrinks.
‘Life assurance’ is a payout for something that will happen, i.e. death, therefore will always pay out. ‘Life insurance’ is protection against something that only might happen during the policy term. Whole life insurance is an investment policy primarily used to better plan for inheritance tax. It’s importance to be aware of these differences when looking online for your life insurance quote.

If you are changing provider checking insurance premiums is important; the grass is not always greener on the other side. As you get older life insurance cover gets more expensive, it can also become more expensive if you have developed and medical conditions. Therefore, if you are 15 years in to a 20 year policy with a fixed premium it may be worth sticking with your original policy for the next five years as new cover is likely to be more expensive. However, this is not always the case – shopping around never hurts.
Trust policies – this type of life insurance cover means that; in the event of your death, the money is paid to a trustee or trustees of you’re choosing. This type of life insurance cover can be a little complex; therefore, it’s wise to consult a financial adviser.

By looking at the various points made in this article, as well as part one, and applying them to your personal circumstances, you will be in a much better position to make the correct decision when it comes to your life insurance cover.

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