With a family life insurance policy, you’ll make monthly payments to an insurer to help protect your family in case anything were to happen to you during the policy duration or term.

If you did pass away during the policy term then the insurer would pay the cover amount you took out – the ‘sum insured’ – to your beneficiary.
This term is usually fixed and will either be a ‘level term’ policy or a ‘decreasing term’ policy.

• Level term life insurance: the sum insured would be the same amount no matter when you passed away during the policy
• Decreasing term life insurance: the amount an insurer would pay out decreases over the policy term to reflect how much you would have paid off your long-term financial commitments if you passed away further into the policy period.

It is also possible to take out a Whole of Life insurance policy. This is when the provider offers you cover for your whole life, and pays the sum insured when you pass away. Whole of life insurance is often more expensive than level term and decreasing because it’s guaranteed that a claim will be made.

Life insurance can either be taken out separately as a Single life insurance policy or as a Joint life insurance policy.