A guide to buying life insurance

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There are three main reasons to take out life insurance:

1. To pay off a large debt, such as a mortgage
2. To protect your family by leaving them money to live on if you die
3. To cover the cost of inheritance tax

If you die, the last thing you want is for your family to struggle financially. Taking out life insurance gives you the peace of mind in knowing that your family does not have to worry about money if you are not there.

There are two main types of life insurance: term assurance and whole-of-life.

Term assurance

On a term assurance policy, you decide how much you wish to be insured for, and the cover period. Should you die within the cover period, then the policy pays out the sum insured to your beneficiaries. If you do not die within the period, then no money is paid out.

A level-term life insurance policy pays out a fixed specified lump sum if the policy holder dies during the period insured.

With a decreasing life insurance, the amount insured decreases over the policy term. This type of insurance is particularly useful to cover a mortgage with an outstanding amount that decreases each year. Premiums for these policies will be cheaper than level-term cover.

Family income benefit policies pay out a regular income to beneficiaries until the policy term, expires. This can make financial planning easy. If you normally receive a net salary of £2,000 a month, for example, then you can take out a policy that pays out the same amount so that your family can continue to enjoy the same lifestyle.


With term insurance policies, if you are still alive after the term ends, then no money will be paid out. Whole-of-life policies pay out whenever you die, which means that they are guaranteed to pay out at some point.

Factors to watch out for

When looking for a life insurance policy, there are a number of points to consider.

Some policies may appear cheap at first because they have a low monthly payment, but check that the payments will not increase over time. Some policies are reviewable with premiums only guaranteed for a fixed period, after which they could increase.

A joint policy that covers both partners is often better value than purchasing two separate policies.

If you have existing health issues, make sure you declare them, otherwise the policy could be invalid.

The best place to buy life insurance

It is best to purchase life insurance through a broker, because they have access to deals not available on price comparison websites, or directly from an insurance company.

Why not contact Ascot Mortgages today to discuss your insurance requirements. We can give you a quote in a matter of minutes. Life insurance arranged through Ascot will provide you with the peace of mind in knowing that you loved ones are protected in the event of your death, and that you have found the best deal possible.

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*Privacy Notice - Any information provided will be treated with confidentiality and will only be accessible within Ascot Mortgages