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        Updated: April 17, 2024

        What Does Life Insurance Cover?

        Life insurance can provide essential funds when your family needs them the most, but what does it actually cover? Find out in this guide

        Ask a quick question

        We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in life insurance. Ask us a question and we'll get the best expert to help.

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        At some stage in life, you might need to consider taking out life insurance to give you peace of mind and protect your family and loved ones in the event of your death.

        In this article, we look at life insurance, what it covers and some life insurance exclusions you might want to look out for.

        What life insurance covers

        Life insurance pays out money in a lump sum or in regular payments to your family or nominated beneficiaries to help them cope financially in the event of your death. The money could be used to pay off debts, bills, mortgage payments, or to cover general day-to-day living expenses. Most life insurance policies will only pay out in the event of death.

        However, there are some policies which provide cover if you’re diagnosed with a terminal illness in the period you are insured. The exact circumstances of your diagnosis and the type of cover your policy gives you will affect whether your provider will pay out in the event of a claim against a terminal illness.

        If you want to be certain you and your family have financial protection in the event of critical illness or disability, you might need additional insurance to provide cover.

        What does life assurance cover?

        Life assurance covers you from the time you take out the policy to your death, whether that’s weeks or decades after taking out the policy. Life assurance is usually sold as ‘whole of life’ or permanent insurance. It takes many forms and may cost more than a standard life insurance policy since it guarantees a payout at the end of the policy.

        Due to the ‘whole of life’ aspect of this insurance product, some insurers will want you to continue making regular payments until your death, but others allow you to cease payments when you reach old age – 85 for example – and still pay out when you die.

        If you’re interested in getting life insurance and want to understand if you should consider a life assurance policy instead, talk to one of the expert, independent advisors we work with.

        Speak to a expert today

        What doesn’t life insurance cover?

        When you take out life insurance you need to be aware that there may be circumstances your policy does not cover you for.

        Your life insurance may not cover you if:

        You die because of drug or alcohol abuse.

        You have a serious health condition at the time of taking out the life insurance policy and your death is due to that health condition.

        If you take your own life. Most policies won’t pay out in the event of suicide within the first year of taking out the life insurance. After the initial 12-month period, most will pay out in the event that the person insured dies by suicide.

        Some insurers might not pay out if the insured person takes their own life and had a history of mental illness which wasn’t disclosed at the time of taking out the life insurance.

        You participate in dangerous sports you will need to declare this at the time of taking out the life insurance to give you more protection than your policy will pay out in the event that you die while participating in this sort of activity.

        If you lie or fail to disclose anything that may later be relevant to your eventual death, your insurance policy won’t pay out. The top reason for a policy not being paid out is down to fraud or omission.

        For example, if you’re diagnosed with cancer and fail to inform your insurer or say you have cancer but don’t disclose it at the time of making your application, the claim may be rejected when you die.

        It’s vital you’re completely honest about both your health and your lifestyle when applying for life insurance to avoid complications and ensure your policy will pay out on your death.

        Can I get insurance for some of the things life insurance doesn’t cover?

        If you want to make sure you’re covered in the event of long term illness, critical illness or disability there are products you should consider alongside your life insurance policy.

        • Critical illness insurance – provides financial protection if you are diagnosed with a specific illness, medical condition or disability as specified inside the policy terms.
        • Income protection insurance – pays a monthly income to you in the event that you are unable to work due to injury or illness.

        Speak to an advisor

        Call us on 0808 189 0463 or make a quick online enquiry for a free, no-obligation chat.

        We’ll introduce you to one of the expert advisors we work with. They will be happy to answer your questions and ensure you get the right life insurance policy for the best price.

        The advisors we work with are independent and have access to insurance providers across the whole UK market.

        Ask A Quick Question

        We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in life insurance. Ask us a question and we'll get the best expert to help.

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        Pete Mugleston

        Pete Mugleston

        Mortgage Expert, MD

        About the author

        Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

        Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

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        FCA Disclaimer

        *Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us as well as any of our own are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

        Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.