With so many different types of life insurance available, it is easy to become overwhelmed by the sheer amount of choice. Life insurance should be on everyone’s priority list, especially those who have families, but to get the best value for money, it’s important you are aware of the various types of life insurance policies, so you pick the policy that is best suited to your circumstances.

We at Cuuver are here to talk you through the various types of life insurance available, and who could benefit best from each policy.

Whole-of-life policies

You guessed it, a whole-of-life policy is an ongoing life insurance policy that will pay out in the event of your death, whenever that is. These types of life insurance policies tend to be more expensive than others available because they are guaranteed to pay out at some point, whereas others will only pay out if you die by a certain point in time. Whole-of-life insurance policies are fantastic investments for people with families, who are looking to ensure some financial security for the people they leave behind.

Joint life insurance

We have already provided an in-depth look at joint life insurance in a previous post, but the basics bear repeating. Joint life policies are perfect for couples that want to leave their partner/children something when they die.

Available as “first death” or “second death” policies, you can either take out a policy that pays out after the first partner dies, or which pays out after the second partner dies. Bear in mind that joint life insurance is more expensive than a single life policy for one person; however, this type of life insurance should work out cheaper than paying for two separate single life policies.

Family income benefit insurance

This life insurance policy is best suited to people who have dependents that may suffer financially if the main breadwinner were to pass on. Instead of paying out a lump sum, this policy will pay out a regular income for the remaining term. You can choose to match your current salary to ensure your family won’t need to alter their standards of living.

The positive side of family income benefit insurance is that is one of the most affordable types of life insurance policies. The negative edge comes in the fact that it does not pay out for very long if the policyholder should die late in the term.

Level term insurance

A level term insurance policy will last for a prearranged length of time and will pay out if you die within that timeframe. This is probably the simplest type of life insurance and is affordable for most people. You can either choose to take out a policy to cover a fixed debt, such as an interest-only mortgage, or you can select a policy to pay out a lump sum to your dependents when you die.

Decreasing term insurance

One of the most affordable types of life insurance, decreasing term insurance is best suited to those who have a repayment mortgage and next of kin who are able to handle other expenses.

Decreasing term insurance policies last for a pre-arranged number of years, usually the same length of your mortgage, and will pay out if you die during that period of time. Because this life insurance policy is intended to repay a mortgage, the payout amount will decrease each year as your outstanding loan payment decreases.

Compare life insurance policies with Cuuver.

This should not be constructed as advice and is guidance only.