A common question that UK citizens have is: how does life insurance work?

What is life insurance?

Life insurance is a legally binding contract between an insurer and a policyholder in which the insurer provides a payout to beneficiaries upon the policyholder’s death. This payout is called the death benefit and the length of time for which the insured person is protected by the policy is called the policy term. To keep the insurance cover, the policyholder must pay a monthly premium.

But how does life insurance work UK? To obtain life insurance, you must first apply for it. The insurer will then assess your application in the underwriting process. This refers to the procedure by which the insurer evaluates your level of risk.

Your level of risk is important: The insurance company decides the monthly premium based on your health condition and lifestyle. Life insurance UK cost will be based on the following factors:

  • Your age
  • Your health condition
  • Your lifestyle/habits

Sometimes, they would also keep your hobbies, medical history and occupation in mind.

Getting declined for insurance is not an issue: a large majority of people are approved for insurance. If your risk is high, you will most likely just pay a high premium amount.

Before applying for insurance, you must choose a policy type. The right type of policy for you depends on your main financial goals, such as paying off your mortgage (decreasing term insurance is ideal for this) or ensuring that your family has a regular source of income after your death (family income benefit ensures this). The other common types of insurance policies are the following:

  • Level term insurance
  • Universal life insurance
  • Retirement plan
  • Endowment plan

You must also decide the amount of cover you need. Insurers set lower and upper limits on this but the range is quite high. For some policies, you might also have to choose a policy term: the length of time for which you want the cover.

We would recommend you to talk to one of our advisers for life insurance quotes.
Any quote that your adviser provides you with will take into account your circumstances, your medical history, as well as your budget!
Call 011-3733-4610 – Monday to Thursday from 11.00 to 19.00 and on Friday between 11.00 and 16.00
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