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InstantCover.net has been designed to save you money on your life insurance and save you time. We review every online life insurance provider to bring you our our top recommendations. The insurers below offer a great combination of low prices and outstanding levels of cover.

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When you have found a policy which covers your personal requirements you can still check the same cover with several insurers to get the best premium. If you know exactly what you want and do not require advice you can get some good low cost quotes. As with most insurance policies you need to complete and sign a proposal form. With life insurance this form will require information about your age, health and occupation. You must make sure you complete the proposal form accurately, any failure in this can in some cases mean that your insurer will not pay out in the event of a claim.

Remember that a life insurance policy will generally have a very long term, so generally insurers make every effort to ensure you have full knowledge of all the terms and conditions of the policy your are applying for. However, if you have any problems you are still covered by a cooling off period of at least 14 days. If you change your mind for any reason during this time you can cancel the policy with the insurer and receive a refund of any premiums you have initially paid out. After the cooling off period you are still entitled to cancel a life insurance policy if you so wish but you would not receive a refund of any premiums you paid.

Policies for Protection and Saving

For most people, a life insurance policy is their financial protection for their family in the event of an early death, but it can also be a way of saving. This combination of a life insurance policy being a savings plan as well as insurance makes it different from any other type of insurance.

Some policies are only insurance protection, others help you save and some do both. You have probably heard of many different types of life insurance. Below is a general information guide to what some of the more common types are. Please note this is for basic information only, if you are unsure what type of insurance policy you may need, you will need to seek advice before taking out life insurance.

Term Insurance – This is generally the cheapest form of protection and usually offers a high level of cover for a low premium. Most people have this as a very basic, straight forward type of cover and it is very easy to take out. Cover can be arranged for each individual and some policies will also cover a spouse or partner under the same policy. Although term insurance is fairly straight forward there are still various types:

Level Term – This is the low cost cover most people are familiar with, you are insured for the same amount for the same monthly premium for the whole of the agreed term. Many people use this for life insurance to cover the term of a mortgage.

Renewable Term – In this case you have an option after a certain period (usually five years) to take out a further term insurance policy without having to complete a new proposal form detailing evidence on your health and/or occupation. Usually this is providing the policy does not continue after you reach a certain age (sometimes 65).

Convertible Term – This can be beneficial if you want cheap life cover initially, possibly while you are on a limited income or your family is young, with the option of changing your cover without having to take a whole new policy. You can convert the policy to a whole life or endowment insurance again without having to give further evidence with regard to your income or health. If you do decide to convert the cover to either of these options, the new policy will usually cost the same as a normal endowment or whole life policy would based on your age at the time of you exercising the option. For some these options are valuable in later life if their income has increased or their health has declined.

Decreasing Term – The sum insured decreases by a fixed amount each year of the term ending at nil at the end of the term. The premium, however, usually stays the same during the term of the policy. Again some people use this type of insurance if they want to insure a specific repayment mortgage or long term debt which decreases year by year.

Increasing Term – As indicated, the sum insured increase each year by a fixed percentage of the original sum. The premium paid also increases as the sum insured increases; these are usually taken out by people who want their cover to increase automatically as their earnings increase.
Family Income Benefit – In this type of insurance, if the policy is require to pay out it is by a regular income paid to your dependants for the rest of the term. The income can be paid out monthly, quarterly or annually. Some policies provide and income which increases each year by a fixed percentage.

Whole Life Insurance – This basically pays out the sum insured whenever you death occurs. Premiums are usually more expensive than with a term insurance because the policy is not limited to a fixed period of time or term. The insurer will pay the sum insured upon your death, whenever that is. With some policies of this type you have to continue paying premiums until you die, but with others you only pay premiums up to a certain age, which could be anything from 65-80, but still the insurer pays out the sum insured upon your death. You can also arrange whole life insurance with profits or have it unit-linked (see below).

Endowment Insurance – This is a policy which offers both protection for your family and savings for the future. It will pay out to help your dependants if you die while at the same time being a system of long term saving. As this type of insurance also saves premiums will be more expensive that protection insurance alone. With endowment policies the term is agreed for a fixed period of time (this could be anything from 10 to 25 years) at the end of the term you receive a lump sum. This amount is either the sum insured along with bonuses (with-profits) or the lump sum is the return of all the money invested along with the investment growth (unit-linked), there is a little more information on these two types of endowment policy below. With either type, if you die before the term or maturity date of the policy, the policy will still pay the sum insured or the value of the policy at the time if greater.

With-profits – The money you pay into a with-profits fund by way of your premium is pooled with other premiums and invested by the insurance company. These investments may include stocks and shares, property, cash accounts and bonds. The investment growth achieved by the fund is paid to you by bonuses which are added to your policy. Once bonuses have been added, they usually cannot be taken away. Also the investment return your policy pays should be arranged so that you are protected to some degree from the more extreme variations of direct investment.
However, investment fund growth, and therefore your bonuses, cannot be guaranteed. Although there is no guarantee of the final value of your policy, it is likely that bonuses will add substantially to your sum insured. Where this is the case you can get a good investment return over the years of your endowment policy. The with-profits type of endowment policy can be a way of regular, long term saving with a good return and relatively low risk, but you must bear in mind you will be given no guarantees.

Unit-Linked –With unit-linked policies, there is no guarantee of the value of the sum to be paid on maturity, you are only guaranteed the sum insured in the case of death. The insurance company invests you premiums, but in the case of unit-linked policies the investments are in specific funds chosen by you. The amount payable under your policy depends on the value of investments in those chosen funds at the end of your policy term (maturity).The insurance company will probably offer a range of different funds which you can chose to have your policy linked to, but make sure you have a full explanation of each option and that you understand the risks as well as the opportunities with these. The potential benefit from a unit-linked policy can be greater than a with-profits option, but remember that the risk can also be greater as the value of investments can fall as well as rise and your eventual sum could suffer as a result.

Common Extras

Most life insurance policies have optional extras, the most common of which are:

Critical Illness – This provides cover against a list of illnesses contained in the policy which would usually stop you working or would disable you so that you require long term care or possibly would need adjustments to your home. If you claim for critical illness the policy would either pay out a lump sum or pay a regular income for a set period. You can take out critical illness cover as insurance on its own, or have it as an addition to your life cover policy. Make sure you know what is and is not covered as this may differ depending on your age, present health and occupation.

Waiver of Premium – If, due to illness or injury, you can no longer work in your normal occupation, the insurance company will pay the premiums to maintain your policy benefits. Also, if you are out of work for a period of time, the insurer will cover the premiums for a set period (possibly one or two years) without your policy lapsing and you losing continuation of cover.

Death and Taxes

Life insurance can be arranged so that on your death the sum paid out from your insurance does not form part of your estate and therefore not liable to Inheritance Tax. The proceeds of the policy can be used to pay any tax for which the estate is liable or to cover your dependant family for general expenses during the wait for money from your estate to become available to them.
Check with the insurance provider or your adviser if the policy you are thinking of taking is a ‘qualifying policy’ in terms of income tax. This means that the policy has satisfied certain criteria so that the benefits paid on death or maturity are not subject to income tax. One of these conditions is the requirement that premiums have been paid at annual or shorter intervals for a minimum of 10 years or until death if earlier.