The Benefits of Life Cover Insurance in the UK

As we all know life is unpredictable. We plan for the future, unexpected or unfortunate events can throw our finances into disarray.  Life cover insurance provides a financial payout that can help you maintain your standard of living, cover outstanding debts, and pay for the education of your children. Practically assisting your family to deal with any financial difficulty in the event of your demise.

Here in the UK, life cover insurance schemes offer benefits that go beyond simply a lump sum payment. Let's look at some of the key reasons why having a life cover policy can be a wise decision.

Financial Security for Your Dependents

The most significant benefit of life cover is the financial protection it offers your loved ones. Upon your passing, the policy pays out a lump sum that can be used to cover a variety of expenses such as:

Mortgage repayments: The repayment of a mortgage probably takes priority over the other expenses you may have. Life insurance cover can help ensure your family doesn't lose their home when you're the primary earner and you are no more. When paying off a mortgage, you may want to check with the insurer that your payout is able to cover up the dues for the mortgage.

Since life insurance payouts are carried out as lump sum payouts, you will need to know how much your family is entitled to in the unfortunate circumstances of you passing away. A periodical check on the policy will help ensure your insurance benefits are kept updated in order to keep up with your family’s expenses in the future.

Living expenses: The lump sum payout will help cover day to day costs such as groceries, utilities, and childcare. This safety net will allow your family to maintain their lifestyle without the risk of facing a possibly debilitating financial crisis. Losing a family member is hard enough to deal with in itself. By investing in a life insurance scheme, you are assured that they will be able to go ahead in life even during the most difficult of times.

Debt repayment: Probably one of the most difficult situations a family could face is having to settle outstanding debts. Credit cards or personal loans can be a challenging burden. A life cover insurance payout can help settle these debts.

Education costs: Assuring the future of your children is top priority. When you are no more, their path to completing their education could be in jeopardy. Life insurance can help fund their future education needs, ensuring they can pursue their goals without financial constraints.

Flexibility to Choose Your Coverage

Did you know that life cover policies in the UK are customizable? Yes, they are and can be catered to fit your individual needs and budget.

Term life insurance: This type of policy offers coverage for a specific period (term). It could be anything from 10, 20, or 30 years. Typically, there are 2 types of term life insurance. They are:

  • Decreasing term life insurance

In a decreasing term life policy, the amount of cover decreases over time. This type of cover is ideal to pay off a debt that will reduce over a period of time such as paying off a mortgage.

  • Level term insurance

This is the type of insurance some of us might be familiar with. The policy is for a fixed period of time usually ranging between 5 - 30 years. But the payout can be done only if you die during the period of time the policy is active.

As seen in the above examples, level term insurance is essentially a safety net where your loved ones get a lump sum payout in the unlikely event of your demise.

Level term policies are secure and will guarantee a fixed sum. However, the premiums are higher than decreasing term policies.

Whole of life insurance: This is a policy that lasts for the entire lifetime period of the policyholder. In the event of the death of the policyholder, Whole of life cover pays out a lump sum to your family. Unlike level term life insurance, which is a cover for a number of years, this cover has no designated time period. Whole of life insurance carries out the payout as a lump sum only after your demise.

Add-on benefits: Some life insurance policies may offer additional features such as critical illness cover which pays out a lump sum if you are diagnosed with a critical illness.

Affordable Premiums:

Life cover premiums are usually lower if you obtain the policy when you are at a younger age and without any major health issues. Therefore, getting a policy early in life will certainly help you lock in the premium at a lower rate making it an affordable monthly payment.

Tax Advantages:

Life cover premiums paid in the UK may be eligible for tax relief. This is an advantage to further reduce the overall monthly premium. However, you may want to get the advice of an insurance professional to make sure how much of an advantage you will have on tax reliefs. Speak to an adviser at BVS Mortgages and Financial Services. Their advisers will be able to guide and assist you with regard to any benefit you might be able to claim on tax.


Life cover insurance is a valuable investment that offers peace of mind for you and financial security for your loved ones. It helps ensure your family's well-being when you are no more.

As we see in this article, by exploring the available options and finding the right policy, you can take control of your future and protect those who matter most. Remember, life is precious, and planning for the unexpected is a wise investment.

 * Approved by The Openwork Partnership on 14.05.2024"