Understanding life insurance

Why do I need life insurance?

Life insurance is all about protecting the future financial security for you and those closest to you.

Protect your loved ones if you die

Life insurance is designed to protect your family or other dependants from the financial consequences of your death.
By having the right amount of insurance, you are taking an important step towards making sure that the people you care about – and who depend on you financially – will not face major money worries if you die.

Protect you and your loved ones if you suffered a serious illness

Critical Illness insurance aims to provide the same security and peace of mind for you and your family – but this time against the financial effects of you being diagnosed with a serious illness.

UK Life Insurance Market

We have changed our credit outlook for the UK life sector to stable from negative. The change in outlook primarily reflects three factors (1) our expectations of earnings stability supported by increasing cash generation; (2) the industry’s strong and resilient capitalisation, which we expect to continue, sustained by conservative capital management; and (3) the strong performance of captive asset managers. However, these factors are counterbalanced by a degree of short-term disruption likely to arise from the Retail Distribution Review (RDR), the risks posed by insurers’ expansion into “new” investment areas and the UK's weak economic growth outlook.
 » The profitability of the UK life industry is stable and supported by growing cash generation. We expect the industry’s earnings to remain healthy overall, whilst earnings quality will improve given the focus on cash generation. The low interest-rate environment will gradually reduce profitability, but only marginally, given the industry’s relatively low sensitivity to interest rates.
 » Capitalisation has improved and we expect continued conservative capital management. The introduction of Solvency II, although postponed, has kept capital in check. Capitalisation has rebounded from its lows according to various capital metrics and is higher than pre-financial crisis levels. In addition the exposure to peripheral Eurozone investments is minimal.
 » Captive asset managers have helped insurers to capture significant growth. Captive asset managers have provided income diversity and helped some UK life insurers to expand and partially offset the historical erosion of cash flows in the life insurance market. Over 2013, we expect this trend to continue.
 » Short-term disruption is likely to arise from the RDR. The introduction of RDR at the end of 2012 will reduce the number of Independent Financial Advisors (IFAs) and, consequently, life sales are likely to decline over the outlook period.
 » Insurers are increasing their credit exposure to “new” asset classes, albeit in modest amounts thus far. The retrenching of the banking system and the low interest-rate environment has meant that insurers are increasingly expanding their investment activities into the realm of banks. We believe that risks arise from the insurance sector’s often limited investment experience in these “new” assets and the need to develop specific expertise that companies might currently lack.
 » UK economic growth remains weak, albeit long-term growth prospects for the UK life sector are strong. The operating environment for UK insurers remains challenging, given the weak economic growth prospects and high level of household indebtedness, albeit some pockets of growth exist, particularly in the annuity and protection lines. We also expect long-term growth from the expanding pensioner

How to Compare Life Insurance Quotes

Life assurance is a financial product that no one really wants to discuss. However, if you want to put something in place to help your family financially should the worst happen it makes sense to get the best life insurance policy you can.
Although you hope you’ll never need to use it, getting the best life assurance policy is a must for anyone looking to protect their family from financial hardship should they pass away.
Here’s how to compare life cover quotes to make sure you get the best term life insurance or whole life insurance for your money.

Do you need life insurance & if so how much?

Before beginning your search for cheap life insurance quotes you need to ask if it you actually need life cover.
As a general rule, if you have dependants who rely on your income then you should consider a life insurance cover policy to protect them financially should something happen to you.

Decreasing or level term assurance?

If you have decided that you need to take out life insurance then you will need to consider which type of life cover best suits your needs.
There are typically two main types of life cover: whole life insurance and term life insurance.
Term life insurance is designed to run alongside a financial product, typically a loan or mortgage, and is there to pay off your debt should the worse happen. Term life insurance policies will run for a per-determined period - usually the duration of your loan or mortgage etc is paid of- and can either decrease in value along with your outstanding debt or be fixed at a set value throughout.
Whole life insurance is designed to run on an ongoing basis and pay out a lump sum on your death, usually to cover funeral expenses or provide financial support to family members.
However, as we will all pass away at some stage, whole life insurance policies tend to generate more expensive life cover quotes.

Check the application criteria

Many life insurance providers limit their cover to applicants of a certain age and then automatically end the cover when you reach a certain age.
If you are looking for over 50 life insurance or over 60 life insurance in particular then this is something you will need to check when comparing the different life insurance policies on offer.
Make sure you are happy with when you policy will expire and any limitations imposed in the terms and conditions and exclude life cover quotes that don’t give you the cover you want.

Compare quotes

Once you know how much and the type of cover your need you can start to search for the cheapest life insurance quote that meets your needs.
Remember that while the cheapest life insurance quote may be the most appealing financially, unless the policy suits your circumstances you will be paying for the wrong type of cover.

Leave your children a home for life with life insurance

There are so many different reasons to take out life insurance, but your children will often be one of your biggest concerns. In an ideal world, you’ll live long enough, and earn enough money to help them buy their first house, giving them money towards the deposit they need, helping them pick the right house, surveyors and moving company, and on moving day help them move in.
Unfortunately life doesn’t always deal us the kind hands we hoped for, and unfortunately sometimes it can be cut cruelly short. That’s why you take out life insurance. It leaves behind the money your family and children need to do all the things you wish you’d been able to do for them if you were still alive.
Whilst most people will leave behind enough money to pay off the mortgage on the family home, and to provide for the children whilst they are growing up, a growing number of parents are now making sure their policy leaves enough money behind to make sure their children get a jump start onto the housing ladder.
With people now having to find deposits of up to 20%, just to buy their first home, the housing ladder isn’t easy to get on, and once you’re on it, climbing isn’t that easy either.
By leaving your children a lump sum each towards their first home, you can give them that deposit you would have helped them with if you’d still been alive, giving them that first step and guaranteeing that they’d have the equity to make sure they have some form of roof over their heads for the rest of their lives, assuming they spent the money wisely.
Life insurance provides protection in a number of different ways, and financially it’s second to none. Whilst money may not buy happiness, it certainly helps, and your family will have enough to deal with if the worst happens to you, without having to worry about finances as well.
By leaving them a life insurance payout you can make sure their whole grieving process, and the rest of their lives is a lot easier.

Women should take out life insurance whilst its 26% cheaper

A recent survey by one of the leading insurance comparison websites has found that the average cost of life insurance for women is 26% less than it is for men, quite a large difference and one that women should definitely take advantage of. Those women thinking about taking their time over their decision to buy life insurance should think again however as the new EU rules on distinguishing between different sexes when offering insurance products come into effect in November, and will promptly put an end to the price difference.
The new ruling states that insurance companies can no longer use sex as a statistic by which to price their insurance premiums, with life insurance being one of the many areas where women are at an advantage, because they are statistically less likely to die. Women drivers will also suffer as their car insurance will no longer be cheaper, although they will benefit when they buy annuities.
Those women looking to buy life insurance in the next few years, or who feel they may need to increase their level of cover should seriously consider making the changes now, as 26% is quite a saving when you work out the difference over 25 to 30 years.
Customers looking for the best prices already flock to websites like Life Insure where they can compare the best prices from the biggest insurers, and there are a number of different providers who are looking to increases their prices now in preparation for the changes in November.
Acting now is the best way to make sure you can take advantage of the lower prices charged, before the EU ruling takes effect, saving you thousands of pounds over the term of your policy.
Life insurance is currently at its cheapest ever level for both men and women, making now the perfect time to buy, and with the new budget tax loophole changes set to increase the price for everyone next April, there could never be a better time to buy life insurance than this month.

Buy life insurance

Nearly everyone in the UK will have a need for life insurance at some point in their lives. Life insurance has been designed to help people look after their financial responsibilities if the worst happens, and is a great way of making sure your family are looked after if you were to die unexpectedly.
Life insurance is currently at the lowest cost it’s ever been, as people are living for longer, and the number of people claiming has reduced. It does still however hold its place as the most important form of insurance you’ll buy, and the amount you spend on it now can hugely influence the amount you’ll spend over your lifetime.
Many people leaving university and getting their first jobs will not even be aware that life insurance exists, let alone the importance of the cover, and they also won’t be aware that the cheapest time for them to buy  is in their early twenties, and that the level of cover they can buy then will not increase or the whole term of the policy.
If a 21 year old took out a 40 year policy covering them for £300,000 they may be hugely over covered at the beginning of their lives, but by the time they have had a family and bought a house their level of cover would be about right. They’d also only expect to pay about £15 a month for that cover for the whole policy, costing £7200 over the whole 40 years.
If the same customer bought their cover at 31, for a 30 year policy they’d expect to pay around £40 to £50 a month for their cover, spending a massive £9000 more over the thirty years, spending £16200 over the 30 year period.
Whilst the 21 year old has ten years of outlay whilst they don’t really need the cover, in the long run they are far better off, and protected just in case.
Life insurance provides cover at a great rate, but if you can afford to cover yourself young, it will really make a huge difference to your overall lifetime outlay on life insurance.

Supermarket life insurance

The last few months have seen a huge increase in the number of supermarket deals which tempt customers into taking out life insurance with their insurance companies in exchange for extra loyalty points, gift vouchers in store and even cash back. Whilst the life insurance seems to be a special offer, with added incentives to take it out, experts are warning customers to be careful as all might not be as special as it seems.
One of the biggest problems facing consumers is the panic over the increasing cost of life insurance. Over the next few months the cost of life insurance is set to increase for women, and from January the cost of life insurance for everyone looks likely to rise as well, as changes to the tax rules mean life insurance companies can no longer offset profits on investments against the cost of running their life insurance business, for tax purposes.
As a result people are panicking, and being tempted by these offers when they should shop around instead. Here at Life Insure we have seen firsthand the benefits our customers get when they use our website to find the cheapest cover, and we’ve spoken to hundreds of happy customers who have found a cheaper life insurance deal by using our comparison page.
Customers being tempted by a £100 gift voucher should consider the difference in cost they may be paying over the next 25 years, and not just the small gain they make now.
A life insurance quote costing just £5 a month less, very common when you search all the leading life insurance providers for the best prices in one place, can give you a saving of £1500 over a 25 year period, substantially more than the £100 you gain from buying your life insurance from your local supermarket.
If you run a search and find that your supermarket is the cheapest place for your life insurance, then buy it there, but with a life insurance quotes search taking just a few minutes of your time, and the potential to save thousands of pounds, all customers should consider comparing the cost of life insurance before buying it from the first place they offer it.