What is life insurance?

People choose life insurance as a safety net to pay their mortgage as one large payment or in regular instalments should they die and are unable to provide for their family.

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The amount paid out is dependent on the cover level purchased. You choose how it is paid and whether it will be used for covering mortgage or rent bills, for example. For advice, consider Insurance Brokers Bristol at a site like Mark Richard, a leading Insurance Brokers Bristol.

You may need to think about whether accepting money from a life policy will impact any means tested benefits your family could otherwise qualify for.

The main life insurance types are:

Term life insurance policy

Whole of life policy

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What is not covered?

This type of cover usually only includes death. If you are unable to provide because you become disabled or ill, you won’t be covered.

Some policies include terminal benefits, although this is not always granted automatically. Benefits will be paid if a terminal diagnosis is received but you should always check the policy conditions to see if you’re covered.

Most policies have a few exceptions of things that they do not cover. They may not pay out, for example, if death occurs because of alcohol or drug abuse. You usually have to pay more to be covered if you take part in adventure sports, as well.

If you have a serious health problem when you take out a policy, your insurer may exclude any causes of death associated with the disease.

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