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What is life insurance?
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Once you’ve bought a life insurance policy, simply keep it active by making your premium payments. During the policy, in the event of your death, your loved ones will be able to make a claim to receive a financial payout.
Naturally, the amount of money paid out will vary, depending on the type of policy you have and the level of cover you take out.
It's important to remember that life insurance policies have no cash value at any time. This means if you get to the end of the policy with no claim made, you’ll get nothing back. If you don’t pay your premiums, then your policy will also end, and you’ll get nothing back.
Watch a short video to learn more about life insurance:
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There are a few types of life insurance you may like to consider:
- Level-term life insurance – with this type of policy, the benefit amount stays the same for the full term. So, you’ll know exactly how much your loved ones will receive in the event of a claim.
- Decreasing term life insurance – here the amount paid out will decrease over time. This could be useful if you just want the benefit to cover a financial commitment, such as a mortgage, which decreases with each repayment.
- Increasing cover – this takes inflation into account. That means the amount of benefit the policy provides may increase over time.
- Whole of life insurance – covers you for your whole life. This will pay out a lump sum upon your death, whenever that may be. This level of cover is usually the most expensive.
Level term and decreasing term life cover are the main types offered by Lloyds Bank.
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Life insurance covers you in the event of your death, providing a lump sum payment to your loved ones, if a valid claim is made.
Financial support in the event of your death could help in several situations. Your loved ones could use it to support mortgage repayments or to cover bills, debts and other living costs. Or, it might be helpful for taking care of children or grandchildren.
Even if you don’t need life insurance to cover essential outgoings, it could help your loved ones to live more comfortably in your absence.
You can also get joint life insurance, suitable for couples and even business partners. In this case, they could use the payout to meet future household or business expenses.
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Whether you choose to buy insurance really depends on your circumstances.
If you have sizable financial commitments, you may want to cover those, so that you don’t burden your loved ones in the event of your death.
Joint life insurance could help to cover shared commitments – either with a life or business partner. This could help to cover things like loans and mortgages, so one party doesn’t have to deal with all the future expenses on their own.
Life insurance may also suit parents or grandparents who want to provide for their children, helping to cover living costs, further education etc.
If you have a family or loved ones who would benefit from a payout if you die, you may want to consider life insurance cover.
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The cost of life insurance will vary depending on:
- The type of policy – some life insurance policies may last longer and pay out more than others, which can affect the cost of your premiums.
- Your age – the cost of life insurance can increase the older you are, as the chances of a claim being made could be higher.
- Your health – if you already have a medical condition or are at risk of developing one, this could affect the cost of your premiums.
- Your lifestyle – if you smoke and drink alcohol regularly, an insurer may charge more for life insurance.
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You may choose to combine your life insurance with critical illness cover. This would also give financial support to you and your family if you were diagnosed with an illness covered by your policy. You can purchase this alongside a Lloyds Bank life insurance policy, or separately if you’d prefer.
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If you feel life insurance is right for you, why not get a quote.
To be eligible for life insurance, you must be:
- A UK resident.
- Aged 18 – 59.
Scottish Widows – who are also part of Lloyds Banking Group – arrange our life insurance policies. They are our life insurance experts, helping to protect what matters most for over 200 years.
Let’s look at the details
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There’s no ‘best’ age to get life insurance, as there’s no way of telling when a claim will be made. As long as you’re at least 18 years old, you can apply for life insurance. Some people may choose to get life insurance as soon as possible, while others might prefer to wait until they have commitments like a family or mortgage. Life insurance might be cheaper the younger you are when you take out a policy.
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No, life insurance can be for anyone who is a UK resident aged between 18-59. Your beneficiaries, who would receive the payout in the event of your death, can be a friend, family member, spouse, partner, parent and even business partner. They’ll just need to make a valid claim. A life insurance policy will form part of your will, or ‘estate’. This means it could go towards your inheritance tax threshold, unless you decide to seek further legal advice and put the policy into trust.
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Individual life insurance is a single policy for one person. If you’re in a personal or business relationship, you might like to consider joint life insurance.
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Our life insurance offers cover from 5 to 40 years, up to the age of 69. Policy terms may vary, so make sure the cover you choose meets your needs for the future.
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Life insurance may not cover you if you fail to disclose information about your health or lifestyle. This could invalidate your policy. If you engage in high-risk activities, such as skydiving, policies usually exclude these too. Make sure to read the full policy terms and conditions for more information.