UK Life Insurance Cover

For reliable and cheap life insurance cover


How much cover do I need?

If you are insuring your mortgage then sum insured should match the sum you owe to your mortgage lender.

If you are insuring to provide security for the family, then there are a number of factors to consider.

Insuring a mortgage.
If you are taking out Life Insurance to cover a mortgage it will be important that the sum insured is the same as the amount of money that you currently owe your mortgage lender.

The length of the Life Insurance, the term, should also match the length of time outstanding on the mortgage.

Remember that all policies sold by Brokers Online will have Terminal Illness cover added without any additional cost.

Please see below for the other useful FAQ’s you should read.

Insuring to provide security for the family.
We frequently get asked how much insurance should be taken out in order to provide security for a client’s family.

The problem is there is no set method of working it out. Some people might suggest 5 times your annual gross income others 10 times but we suggest you consider what financial liabilities would need to be tidied up if you died and to what extent your family would need extra capital. Remember that the proceeds of your policy will be tax-free. Now consider the following table:

The following might help you decide how much cover you need.

Current loans

How much money would you need to repay your existing mortgage, overdraft, outstanding HP, or any credit card balances?

£

Dependants

Who financially depends upon you? Your partner and children? You may wish to say to yourself that you need to leave a minimum number of “financial worry free” years for your partner. Take into account that they may be entitled to a pension now or sometime in the future and take into account any other financial provisions you may have in place.

Then estimate their annual living expenses and how much extra they would need each year. If you have children then the younger they are now the more years you might consider providing for them. If they are at private school remember to include those costs and perhaps something towards College or University costs. It’s surprising how much children cost!

£

A sum for unforeseen events.

After you have considered the above add a sum for further unseen events that may face your partner and dependants even well after you’re gone. It’s a sort of additional financial contingency.

£

An inheritance or nest egg?

Many people simply want to give those they love a lump sum nest egg. It would be the final extra amount you add at the end of the calculation.

£

How much can you afford?

You may be surprised at the result of you calculation and it may simply be more than you can afford. It would not be the first time someone has been faced with that! In those situations we suggest that you work out how much you can afford now each month and take out a reviewable policy.

We suggest a reviewable policy because they will maximise the cover you can get now per £ of premium. Over time they will not be the cheapest form of cover but we suggest that your immediate priority is to get maximum cover now for the money you can afford. Our discounts will also help!


Incidentally, we strongly recommend that you get your Life Insurance policy written “In Trust.” This will mean that, if there is a claim on your policy, the money goes straight to the people that you intend to have it. This approach also avoids inheritance tax, which could save up to 40%. It’s a straightforward thing to arrange. The Brokers Online Help Desk can do this for you without cost. Contact them on 01625 416 280.


Other relevant questions…

What’s the difference between joint cover and single cover?
How is Mortgage Life Insurance different from Life Insurance?

secured loans

Is Life Insurance for me?

What else do I need to know about Life Insurance?

How do I get a Life Insurance Quote?

How do I choose the right policy for me?

What if I need cover to be arranged quickly?

How are premiums calculated?

What if I have to make a claim?

Do I need Mortgage Life Insurance instead?

Should I consider Critical Illness cover?

What other sorts of Insurance should I think about?

How do I make a complaint?

What do I need to know about the law and Life Insurance?