This content was reviewed in April 2025.
The information in this article is for general guidance only and is not financial advice. It’s important to talk to a financial adviser to find the best life insurance for your situation.
What is life insurance?
Life insurance, at its simplest, refers to an insurance policy that will pay out an agreed amount when the person insured dies. This payout can contribute towards childcare, clear a mortgage, and help families following the loss of a loved one.
Types of life insurance include Level Term Life Insurance, Decreasing Life Insurance, Increasing Life Insurance, and Whole of Life Insurance. There are also policies designed specifically for those over the age of 50.
There are other types of “life insurances” to protect against events that may happen to your “physical person”.
Other types of insurance, often called “general insurance” relate to property, such as your house, car or belongings.
An overview of insurance types
Insurances of the “physical person” include:
| Insurance type | When it pays out | Why you might need it |
| Life Insurance | On your death. | You have: – Dependents (e.g., children in full-time education). – A partner who relies on your income. – A mortgage to pay. |
| Critical Illness Cover | Upon diagnosis of a covered critical illness. | You: – Need help covering living costs beyond state benefits. – Have insufficient savings to repay mortgages/debts if unable to work. – Don’t have a partner to provide financial support if you become ill. |
| Income Protection Insurance | If you can’t work due to illness or injury. | You: – Rely on regular income for essential expenses. – Couldn’t afford to support yourself/family during extended illness/injury. – Have limited or no sick pay. Are self-employed and lack employee benefits. |
| Investment Life Insurance | On your death and may have a cash value at the end of the policy term. | You have: – Dependents (e.g., children in full-time education). – A partner who relies on your income. – A mortgage you pay. – Plus, you want to build savings to receive when the policy matures. |
Benefits of life insurance
Taking out a life insurance policy can offer a range of benefits, from financial security to peace of mind. Here are some of the key advantages:
- Knowing that your family will be financially protected in the event of your death can offer peace of mind. This lets you focus on enjoying life without worrying about the financial pressure your family might face if you were no longer there.
- Life insurance can help your family to cover essential expenses such as mortgage repayments, bills, and everyday living costs. This can be important if you are the primary earner in your household.
- Life insurance can help support dependents, such as your children or partner when you are no longer around to provide for them. This can help them keep the same standard of living and achieve future goals, such as further education.
- Even if you’re over 50, life insurance can still be a valuable investment. It can help cover funeral expenses, outstanding debts, or leave an inheritance. If you’re wondering ‘is over 50s life insurance worth it?‘ then you can find more information in our dedicated article.
- Some life insurance policies offer additional benefits, such as critical illness cover or terminal illness cover.
Who is life insurance for?
Life insurance is a helpful way to protect the people you care about financially if you die. While it’s often associated with families with young children, it can be beneficial for a wide range of people,
Parents can feel secure knowing their children will be taken care of financially, covering things like everyday living costs and education. Homeowners can also help loved ones stay in the family home by paying off the mortgage.
If you have any outstanding debts like loans or credit cards, life insurance can help pay them off, so your family doesn’t have to worry. And if you want to leave an inheritance, a life insurance policy can help you do that too.
The decision to take out life insurance is a personal one and depends on your situation. If you’re unsure about when to get life insurance, you can find more information in our helpful guide.
Types of life insurance and their terms
Whole of life insurance
A whole of life insurance policy covers you for the rest of your life and your dependents could get a pay-out, regardless of when you die. Whole of life insurance is often more expensive than shorter-term policies.
Over 50s life insurance is a type of whole of life insurance that has a guaranteed lump sum no matter when you die. The policies are typically taken out between the ages of 50 and 80, and the majority take out over 50s life insurance to help to cover funeral costs or outstanding debts.
Over 50s life insurance premiums don’t usually rise, and you often stop paying them at a certain age or within a certain time frame, depending on your policy.
Level term insurance
With level term life insurance, you pick the size of the pay out, known as the “sum assured” and the policy lasts for an agreed number of years, known as the “term”.
The sum assured, and the premiums remain fixed with a standard level term policy, which means neither the premium nor sum assured (your pay out) will increase with inflation.
The policy can cover a fixed debt or provide a lump sum for your dependents in the event of your death.
Decreasing term insurance
Decreasing term insurance is also known as mortgage protection. Your policy lasts for a pre-agreed term that usually matches the length of your mortgage. The level of pay-out usually decreases over the length of the policy, typically monthly or annually.
Increasing term insurance
Increasing term insurance offers a death benefit that grows over time. This type of policy aims to keep pace with inflation or increasing financial responsibility. The premiums usually increase alongside the death benefit, but some policies might offer fixed premiums for a set period. This kind of cover can be useful if your outgoings might grow in the future as it makes sure the payout meets your family’s needs.
How much life insurance do I need?
Life insurance needs will vary from person to person. Before choosing a policy, consider:
- What is it you are trying to protect?
- How much money would you need to protect your dependents? Consider living costs and any outstanding debts, such as your mortgage repayments.
- How much is the monthly premium, and can you afford it?
The following are some common reasons for taking out life insurance and what you will need to calculate.
Protect your mortgage
You want to protect the amount due on your mortgage so it will be paid on your death. In this case, calculate the amount of your outstanding mortgage and consider a decreasing term plan. This type of policy is designed to work with a decreasing balance like a mortgage, making it potentially more affordable.
Shop around, compare quotes, and factor in the length of your mortgage.
Protect your mortgage and other debts
Calculate your outstanding mortgage balance, plus all other loans and credit card debts. A level term life insurance policy might be more suitable, as it provides a fixed payout regardless of how your debts change over time.
Consider if your existing life insurance through work (like a death in service benefit) covers some of this. Plus, factor in the realistic time it will take to pay off these debts.
Protect debts and provide for your family
This is where it gets trickier. Consider the years of income replacement needed, like until your children finish education or spouse reaches retirement. Estimate the annual living expenses for your family, from mortgage or rent to bills, groceries, and education. Factor in existing savings and assets alongside future costs like university fees.
This often requires a larger life insurance policy with a guaranteed payout to cover your family if you die younger than expected.
Expert advice is essential to help choose the right life insurance policy. A financial adviser can help assess your needs to recommend suitable products.
Remember that life insurance needs change over time. Review your policy regularly, especially after major life events like marriage, having more children, or buying a home.
Don’t just focus on the cheapest option. Instead, check the policy provides the right level of cover for your needs. Consider other types of insurance, like critical illness cover, to provide more comprehensive protection.
How long do I need life insurance cover for?
This depends on your individual circumstances and what you want from life insurance. Consider how long your family will rely on your financial support. Will you need cover until your mortgage is paid off? Maybe until your children finish education, or your partner reaches retirement age? Look to choose a term with protection for your family’s needs.
How much does life insurance cost?
The cost of life insurance can vary depending on your age, health, lifestyle, and the level or length of cover you need. Generally, younger and healthier individuals secure lower premiums.
As a rough guide, a healthy 30-year-old non-smoker could pay anywhere from £10 to £30 per month for £250,000 of life insurance cover over 25 years. Getting quotes from different providers is the best way to find the most affordable option for you.
Do medical conditions affect applications?
When you apply for life insurance, you might be asked about your medical history. Conditions like high blood pressure, diabetes, or a history of serious illness can increase premiums. This is because they may raise the likelihood of a claim. However, don’t let this discourage you. Many insurers specialise in cover for people with pre-existing conditions.
Honesty is essential when applying, as withholding information could invalidate your policy and payout.
When might a life insurance policy not pay out?
As the insured party, you must disclose certain matters to the life insurers. If you fail to do so, the insurer has the right to withhold a life insurance pay-out on the grounds of non-disclosure.
In the case of life insurance, any matters relating to the following must be shared:
- Employment
- Medical history
- Mental health
- Lifestyle and hobbies considered high risk, such as skydiving or rock climbing
What types of life insurance does Shepherds Friendly offer?
At Shepherds Friendly, we understand your needs change as you get older. That’s why our Over 50s Life Insurance is designed to give you peace of mind and financial security.
Our Over 50s Life Insurance plan is a simple and affordable way to leave a cash sum for your loved ones when you pass away. Any UK resident aged 50 to 80 years old will be accepted for cover without medical questions.
Shepherds Friendly also offers Income Protection. This can provide a regular income if you’re unable to work due to illness or injury.
How to get a quote
Getting a quote for life insurance is quick and easy. You can either use our online quote tool or give us a call to speak to our friendly team.
To speed up the process, have the following details ready:
- Your date of birth to help us calculate your premiums.
- Whether you are a smoker or not.
- Desired level of cover, or how much you want your policy to pay out.
- How long you want the cover to last.
We’re here to help you find the right life insurance policy to meet your needs and budget.
In summary
Life insurance is an important way to protect your loved ones financially if you die. It can help with expenses like paying off the mortgage, clearing debts, and covering everyday living costs. This way your family doesn’t have to worry about money during a tough time.
There are different types of life insurance out there, like term life insurance, which covers you for a set amount of time. Alternatively, whole-of-life insurance offers covers for your whole life.
Before you decide on a plan, think about how much cover you need, how long you want it to last, and your budget. It’s always a good idea to compare quotes from different companies to find the best deal.
Shepherds Friendly specialises in over 50s life insurance without medical checks. We also offer Income Protection to keep money coming in if you can’t work due to illness or injury.
Remember that life insurance isn’t a savings account or an investment. This information is just a general guide and isn’t financial advice. It’s always best to speak to a financial advisor before you take out life insurance.
Shepherds Friendly is a trading name of The Shepherds Friendly Society Limited which is an incorporated Friendly Society under the 1992 Friendly Societies Act No. 240F. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. FS Registration Number 109997.
