A couple with outstanding debt
Mike and Jen want to know they’ll each be financially secure if the other dies, and neither of them will be left with a debt to worry about.
What they could choose:
They could take out a joint life Insurance policy to cover the outstanding amount on their debts (for example any personal loans, credit cards etc.)
| Type of cover | Value of cover | Length of cover |
|---|---|---|
| Level term cover (joint) | £50,000 | 10 years |
How this could cover them:
If their outstanding existing debt is £50,000 but they know it’s unlikely to reduce in the next 10 years, if either of them died during 10-year period, their debt would be paid off.
If they wanted, they could take out more cover, which would provide money for other costs. If they have other cover in place already, they may need less cover.
Things to be aware of:
- If the couple are different ages or need different cover amounts then taking out a single plan each may work better for them.
- Optional critical illness cover helps if either of them is diagnosed with a specified illness.
A couple who have just had their first child
Joe and Jack want life cover to help take care of their monthly bills, childcare and education costs if the worst should happen to either of them. They don’t have a mortgage.
What they could choose:
They could take out two single life insurance policies.
| Type of cover | Value of cover | Length of cover |
|---|---|---|
| Level term cover (single) | £150,000 | 20 years |
How this could cover them:
If they choose two 20-year policies, this would provide cover until their child is independent.
Single cover would also provide a lump sum to their child if the second partner was to die, after the first.
Things to be aware of:
- By choosing single plans, they can have different amounts and time periods for the cover.
- Alternatively, to save on money they could choose a joint policy. However, this would mean the policy pays out if one of them dies, leaving no cover for their child if the remaining partner dies.
A couple with three children
The Andersons have three children, aged 13, 10 and 9. The parents, John and Ellie, work full time and already have life cover for their mortgage. After a recent scare, they now want to make sure their family would be able to manage additional living and childcare costs if either of them were to die.
What they could choose:
They could ‘top up’ their cover with a new single plan which could help protect their children financially until they become adults.
| Type of cover | Value of cover | Length of cover |
|---|---|---|
| Level term cover (single) | £100,000 | 9 years |
How this could cover them:
A single policy each would provide the cover they want if either or both of them were to die. This could also work well if they wanted to provide different amounts of cover.
Things to be aware of:
- If they want the same cover amount and are happy the cover will only pay out if one of them dies and then cover will cease they could take out joint cover. This works out slightly cheaper than two single policies for the same cover amount and period.
- If they take out level term cover, the lump sum they choose at the start will be the amount paid out if either person dies.
A single parent who has just changed jobs
Tom has left a job that came with a death-in service life insurance policy that would have cared for his child if he died. His new job doesn’t offer life insurance, so he wants cover to provide for his child if he dies. He hopes his child will have a job and be self-sufficient in eight years’ time when she’ll be 22 years old.
What they could choose:
| Type of cover | Value of cover | Length of cover |
|---|---|---|
| Level term cover (single) | £150,000 | 8 years |
How this could cover them:
If Tom chose a policy worth £150,000 this could provide care for his daughter until she was self-sufficient.
Things to be aware of:
- Tom could choose optional critical illness cover to help if he is diagnosed with a specified illness.