Life Insurance in York

Different Types of Life Insurance in York

To give you an understanding of the different types of life insurance out there, we listed several policies that we encounter, as a Mortgage Broker in York, people regularly take out:

Level Term Life Insurance

This particular type of insurance will payout a lump sum or regular monthly payments, but the sum assured will only be covered for a fixed ‘term’ period. We tend to find the duration of the term usually ranges between 5-25 years in 5-year increments.

This policy can coincide to cover mortgage payments and people usually match the life insurance term with their mortgage term, so if you were to pass away and still need to pay the remaining balance off your mortgage, the policy will payout. This means anyone attached to the mortgage will not financially struggle.

Decreasing Term Life Insurance

During our years of being a Mortgage Broker in York, we find that Decreasing Term Life Insurance is one of the most popular choices.

The benefit of taking out this policy is that it’s aimed toward homeowners with repayment mortgages. We tend to find people take out this type of policy to help pay off the outstanding mortgage balance.

The policy mirrors the unpaid balance remaining on your mortgage. As the balance of your mortgage decreases the sum insured follows in line.

Increasing Term Life Insurance

This policy is similar to a level term policy as in you choose a fixed period to have the sum assured. However, instead of the sum assured remaining constant throughout the policy term. The sum assured will increase, this is designed to shield the policy’s total value against inflation and is usually in line with the retail price index.

Whole of Life Insurance

Although this policy might be better suited for your circumstances we tend to this it is a less popular choice than the fixed term policies. As the name of the policy suggests, it covers you for the whole of your life.

As the policy is guaranteed to payout in the event you die, whenever that may be. This is reflected in the cost of the insurance and is usually much more expensive than a fixed term.

Joint Life Insurance

If you are married or in a relationship, we recommend looking into Joint Life Insurance, as you both will be protected in the event of one of your passing. You may still have the ability to have two separate Life Insurance policies if you prefer this. However, this choice is often cheaper than both of you taking policies out individually.

The policy ends when one person dies. This could be seen as a negative with this policy, nevertheless, if taking out the policy was so you can pay off your mortgage, you would still be able to do this with the money as this will be released after the death of one of the policyholders.

Death in Service

Your employer might offer you this policy, although it won’t be the case for all workplaces as they don’t have to but some get life insurance as part of an employee benefits package.

In the lump sum can be up to 5 times your annual salary. Again, there isn’t any specification on what this money is used for. Please be aware that one factor of this policy is that the payout has nothing to do with if an employee died in the workplace.

Taking out Life Insurance as a Single Homeowner

If you are currently a single homeowner don’t disregard any Life Insurance options. If you have settled into a new place and are living on your own without children or a partner.

If you are looking at Life Insurance and want to know if this would help you if you are a single homeowner, get in touch with one of our Mortgage Protection and Insurance Advisors in York.