Life insurance pays out a lump sum (or in some policy types, an income) to your chosen beneficiaries if you die during the term of the policy. It's most commonly used to protect a mortgage, replace lost income for dependants, or cover funeral costs and other final expenses.
Term life insurance
This is the most common and generally most affordable type — it covers you for a fixed period (say, 20 or 25 years) and pays out only if you die within that term. "Level term" pays a fixed amount throughout; "decreasing term" pays a reducing amount, often matched to a repayment mortgage balance, and tends to be cheaper as a result.
Whole of life insurance
This covers you for your entire life rather than a fixed term, so it's guaranteed to pay out eventually — which makes premiums noticeably higher than term insurance for the same level of cover. It's more commonly used for estate planning or covering inheritance tax liabilities than for everyday income protection.
Working out how much cover you need
A common starting point is enough to clear your mortgage and other debts, plus a multiple of your income to support dependants for a meaningful period, minus any existing savings or workplace death-in-service benefit. There's no single right formula — it depends on your family's specific circumstances and what you're trying to protect against.
Health questions matter
Premiums are based partly on health and lifestyle questions (smoking status, medical history, occupation). Answering these accurately matters — a claim can be refused if the insurer finds a policy was taken out based on inaccurate information, so it's worth taking time over the application rather than rushing it.