How Does Life Insurance Work?

Not all life insurance is the same. Learn more about the types of insurance available before you pick which is best for you.

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What is Life Insurance?


Life insurance cover is a type of policy that will pay out a lump sum payment to your loved ones, should you become ill or pass away during the contracted term. It allows your family to deal with any financial worries, should the worst happen.

There are a number of types of life insurance cover, with each type having its own benefits for your family. By understanding the different policies available to you, you are able to make an informed decision and invest in the most suitable life insurance policy for you and your loved ones.

Do I need Life Insurance?

You may consider life insurance cover if you have family members who rely on your income, such as a partner or children. A life insurance pay-out can help to provide for your children as they grow up if they can no longer rely on your income. If you own a home, life insurance cover can help your partner or family to pay off the mortgage.

How does Life Insurance work?

If you were to pass away during the contract term, your life insurance policy will pay out money to your family, usually in the form of a lump sum or instalments. The amount of money paid out will depend on the level of cover you buy. With most life insurance covers, you will have control over the policy and can decide the length of the cover, the amount and who will receive the pay-out.

Why should I consider Life Insurance?

The right life insurance cover could help to replace your monthly income, in order to help your family with everyday living expenses. It might also cover any medical bills, pay off debts and help with any estate-related matters. It doesn’t matter whether you are young or old, single or married; life insurance cover can bring you peace of mind and provide protection for the uncertainties in life.

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** Premiums and payout based on a healthy non-smoker who is an office worker and doesn't have a hazardous lifestyle up to the age of 65. The premium shown is based on Aviva's Income Protection + Plan and is subject to a full underwriting process. Prices are correct as of January 2022.

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This calculator is for informative purposes only and is not to be taken as financial advice, for accurate financial advice please consult with an advisor from Caspian Insurance.