I’d like to bet that most people think all life insurance policies are the same.

I would also be prepared to bet that most, particularly those who took out a policy some time ago and have forgotten the details, think their policy will see them through to the end of their lives.

The truth is, there are lots of different types of life insurance and, in many cases, a policy won’t last until you die.

Check your policy and many people will find they have something called term insurance, probably the most popular type of cover. As the name suggests, this is a policy taken out for a fixed period of time, until your retirement age or the end of a mortgage, for example. It pays out a lump sum or a monthly income if you die within that period. If you don’t, the policy ends and you get nothing. However, it is worth noting that there are some term insurance policies that are renewable at the end.

Within term insurance there are lots of different types of policy, depending on what you want to get out of it. So, for example, there is level term insurance, which pays out a fixed lump sum, increasing term insurance, which rises with the cost of living or decreasing term, which covers a debt that is likely to decrease over time, like a repayment mortgage.

The other main type of life insurance is whole-of-life insurance. Again, as the name implies, this policy guarantees a lump sum payment whenever the policyholder dies.

As with term insurance, there are lots of different policies to choose from within whole-of-life cover. Some offer a fixed premium and a fixed lump sum on death, whilst others add in an element of investment so what is paid out at the end depends to an extent on how well the policy performs.

Interestingly, there are some term insurance policies that can be converted into a whole of life policy.

Insurance is one of those things that we tend to take out and forget about. But as our lives move on and our circumstances change, it is worth keeping our policies under review. What was right for us when we were 21, might not be the best policy now.

I’m more than happy to look at your insurance needs at any time. So if you’re thinking about taking out your first policy or want to make sure your existing policy is still appropriate, please get in touch.