What does life insurance cover?

One of the top asked questions about life insurance is: what does it cover?

How does life insurance work?

When you take out a level life insurance policy, you’ll be covered for the worst case scenario (AKA death). 

This means, with this type of cover in place, if you were to pass away within your policy term, your life insurance pay-out (a cash lump sum) would be paid.

What about other types of life insurance?

So, now you know how a standard life insurance policy covers you, it makes sense to see what the other most popular types of life insurance can cover you for:

• Income protection insurance usually covers between 50-70% of your monthly earnings, if you couldn’t work due to illness or injury, within your policy term. This policy is perfect if you’re in employment, have someone who is financially dependent on you, or have little or no savings.
• Critical illness cover will cover you for a long list of critical illnesses. So if you were to sadly fall ill with an illness as defined within your policy conditions, within your policy term, then you can make a claim on your cover.
• Mortgage protection is there to cover the remaining balance on your mortgage, so in the event of you passing away within your policy term, the policy can pay out a lump sum and the burden of paying off your mortgage won’t be left to your loved ones.
  
  

What can the money be used for?

When the pay-out from your policy has gotten to the loved ones you wanted it to (more about how to ensure this happens as you read on), you’re probably wondering what happens next. And to be honest, there is no set answer to that.

Once your family has received the pay-out, the money will be theirs to do what they want with. Here are some of the top ways that the pay-out from a life insurance policy can be used:

• A nest egg to put aside for any little ones so that they’ll have some money behind them, to kick start their future
• Paying off any remaining debts you may have
• Contributions to any monthly outgoings
• Paying off the remaining balance on your mortgage
• Or the lump sum could simply be kept as back up money which can be utilised to financially support your loved ones throughout their future, as and when they need it

How do you choose the amount of cover you need?


Knowing how much cover you will need can be difficult to work out, as there are so many different factors to consider. Getting the amount wrong could result in your loved ones not being sufficiently covered financially, if the worst were to happen to you.

With expert advice, you don’t need to worry about being over or under protected. With over 200 years combined experience in the industry, it’s safe to say our life insurance specialists know a thing or two about life insurance.

At Caspian, we don’t just help you take out your life insurance policy. We carefully consider your current circumstances, your needs and budget, so that we can tailor a policy that fits you and your life.

Money aside, how else can a life insurance policy help?

Although the main reason any of us get a life insurance policy is for the money, there are other advantages to having a life insurance policy.

Firstly, there’s the peace of mind you’ll receive, knowing that your loved ones would be financially looked after in the event of you passing away. Alongside that, most of the UK’s leading life insurance providers also offer free additional benefits* when you take out a policy with them. Some of these free life insurance benefits can include:

• Access to online 24/7 GP appointments
• Second medical opinions, so if you were ever unsure of a diagnosis, you would have a team of experts on hand to help
• Personal nurses can offer support for a range of different circumstances such as trauma, disability, bereavement, any long-term physical or mental illness such as cancer, cardiac, depression, anxiety, and so much more
• Free mental health support is there when you’re struggling and need advice, the four therapy sessions a year can help with a variety of mental illnesses
• Tailored fitness and nutrition plans can help if you want expert advice on how to train for your goals and what food you’ll need as fuel
  
  

How to make sure the money goes to the ones you want it to

The whole point in taking out a life insurance policy in the first place is to help your loved ones financially, if the worst were to happen to you. To ensure the money from your cover goes to the ones you want it to, you’ll need to complete a form - this is called your ‘trust form’.

There are a few different sections you’ll need to complete on your trust form and at first glance, the forms can appear intimidating. But don’t worry, we have a dedicated trust team, who can help you complete your forms and will even send them off to your chosen insurer!

What’s right for you?

Life insurance can feel complicated and it’s nice to have a helping hand, which is why we’re here.



At Caspian, our mission is to make life insurance simple. With us, there’s no fuss and no jargon, just straight forward life insurance advice and some good customer service along the way. Click below to kickstart your life insurance journey today.

*Free benefits are not contractual and may be withdrawn or changed at any time.