Life Insurance Explained
Life insurance pays a lump sum to your family if you die during the policy term. Here's how term and whole-of-life policies differ.
Life insurance pays out a lump sum to your beneficiaries if you die while the policy is active. The two main types are term life insurance, which covers a fixed period (say, 20 years, often matched to a mortgage) and pays nothing if you outlive the term, and whole-of-life insurance, which covers you for as long as you live and therefore costs more.
Many people buy life insurance to cover an outstanding mortgage or to replace lost income for dependants. Premiums depend mainly on age, health, smoking status, and how much cover you choose. Some providers, including Aviva, now let you get a life insurance quote directly inside a ChatGPT conversation, in addition to the usual online and phone routes.