Comparing life insurance isn't much fun!

Jan 26, 2018
compare life insurance

The challenge

If you want to compare life insurance, an immediate challenge is the sheer number of different types plans. You might be flummoxed by the terminology in use and find it difficult to come up with clear, transparent and understandable descriptions of what each product does and how it might offer the protection you need.

Not only that, but your requirements may be completely different to that of your neighbours or friends, so making sure you get the most appropriate form of life insurance for you is important.

Even when you’ve got to grips with the many different types– and the type that might best suit your needs - your next hurdle is sifting through the many providers and the subtle differences between their respective products and even amongst life insurance policies from the same insurer.

When you are likely to be up against challenges such as these, how might you put a little bit of the fun into comparing life insurance?

Clearing up some of the confusion might be a useful start, so that you may compare your options.

Why buy life insurance

The principle is really quite simple – in return for regular payments of a premium (typically in monthly instalments), your designated beneficiaries receive a cash settlement when you die.

Especially if you are a family breadwinner with dependent children, it  offers a way of providing many financial benefits and security. The cash settlement may be used:

  • to pay off the mortgage (ensuring your loved ones continue to have a roof over their heads);
  • it  may help to clear any debts you left behind;
  • it might be used to pay for the childrens’ school fees or college education;
  • when invested, the settlement may provide an alternative, regular income for your family; or
  • at its most basic, it might pay for or help to pay for your funeral arrangements.

Types of life insurance

There are many types, but they may be split into two broad categories:

Whole of life insurance

  • with this  an assured cash benefit is paid at whatever age you die. Premiums are paid monthly every month until your death (although many policies allow you to stop paying once you reach a given age, say, 90);
  • the policy becomes invalid if you stop paying before that date and there is no cash-in value;
  • whole of life insurance is typically more expensive than the alternative term life insurance. An exception is over 50 life insurance;
  • over 50s life insurance has all the benefits of other types of whole of life insurance plus a guaranteed acceptance for anyone over the age of 50 and without the need for a medical examination. Note, however, over 50 life insurance policies tend to be for smaller sum insured amounts compared to other whole life policies;
  • if you are over 50 you might want to make sure that these products are included in your search for life insurance quotes;

Term life insurance

Types of term insurance

When you want to compare life insurance, it is also important to bear in mind that the life insurance quotes you receive also reflect the several different types of term insurance on the market:

Standard term insurance

  • this is the most straightforward of your term options and guarantees an assured cash benefit if you die with a certain number of years;
  • both the amount assured and the cost of monthly premiums are typically fixed throughout the term of the insurance;

Decreasing term insurance

  • in this variation, the amount of the settlement if you die within the insurance term steadily decreases over the length of the policy – and this is reflected in the generally cheaper life insurance quotes you are likely to receive;
  • since the declining level of benefits matches the steady reduction in the balance outstanding on a standard repayment mortgage, it is often referred to as mortgage protection life insurance;

Increasing term insurance

  • on the other hand, if you want to head off some of the likely effects of inflation in reducing the real value of the benefits upon your death, an increasing term life insurance policy steady raises the amount of that final settlement;
  • If it is an index-linked life insurance policy, those benefits are increased in line with the Retail Price Index (RPI).

 Life insurance providers

There are a number of factors you need to consider when you compare life insurance. For example:

  • does the policy meet your own unique protection needs, as well as your budget?
  • what does the policy offer you? Different providers may have different benefits, terms and conditions so make sure you check your options out.

 Using our life insurance comparison service, you can compare life insurance quotes from some of the leading life insurance companies including: Aviva, Vitality, LV, Legal and General, Zurich, Royal London, and Aegon.

Our free to use service enables you to can see your options enabling you to make an informed decision as to the most suitable life insurance policy.

Life Insurance

Not much fun, but a necessity

Ashley Shepherd is an Over 50s Personal Finance Expert

ashley shepherd

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