But with a huge range of life insurance plans on offer to protect us against a variety of life-altering events, finding the right one is not always easy. Here, we look at the plans available, who should take them out and what pitfalls you need to watch out for. This will pay out a lump sum in the event of a named person dying during the term of the policy. This can be one named person or the first person in a couple to die. However, if you are single and have no dependants, there is not much point in taking out life insurance as you don't have anyone to protect against the consequences of your premature demise.
Term insurance is the most straightforward type of life cover.
You pay a set premium for a fixed period and, if you die in that time, you know much money will be paid out. Your cover does not depend on stock market performance, so there is no danger of a hike in premiums after a few years. However, it also means you get nothing back at the end of the term of the plan. Most people with repayment mortgages have term insurance. It is possible to have decreasing term insurance, so the amount of life cover is linked to the outstanding mortgage - as you pay off your home loan, the level of life cover reduces, too.