The Benefits Of Life Insurance In 2024

Elaine Brookes Steve Case

Author: Steve Case - Insurance Expert

Reviewed & Fact Checked By: Elaine Brookes

Updated: 8th December 2023

When asked, you’d probably be able to name the primary benefit of life insurance without giving it a thought. It provides financial safety to your family if you pass away unexpectedly.

Benefits of life insurance

And while that is the correct answer to give, life insurance provides many more benefits than that. Moreover, given how many different types of life insurance policies are out there, each has its distinctive advantages. 

In other words, answering the question about the benefits of life insurance is much more comprehensive than one might think. With that in mind, we’ve prepared the following guide. 

What Are the Benefits of Life Insurance?

Let’s start by naming some of the key benefits of life insurance policies. The main one is that such a policy ensures your loved ones have the resources to carry on living if you were to pass away.

However, life insurance can also:

  • Be used to protect your mortgage
  • Cover outstanding debts
  • Replace an income
  • Provide additional protection in the event of illness
  • Cover the expense of one’s funeral
  • Pay off other debts, for instance, credit cards, student loans, or car loans
  • Avoid or minimise inheritance tax if you own a large real estate

So, essentially, life insurance provides you and your family with peace of mind that your loved ones will be taken care of if you die unexpectedly. Getting the right life insurance policy can make all the difference regardless of your age or occupation

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Different Types of Life Insurance and Their Benefits

There are several types of life insurance policies, and since they all protect various aspects, they naturally offer unique advantages. That said, to explain the benefits of life insurance the right way, we need to look at each policy in more detail.

Term Life Insurance

As the name suggests, term life insurance will cover you for a specified period. For example, with a term life insurance policy for 10 years, your family will receive a payout from a policy provider if you pass away within that time. If you don’t, the cover will expire. 

When opting for term life insurance, you’ll be required to pay monthly premiums. Insurance providers calculate them using your age, medical history, smoking status, level of cover, and length of cover. 

Term life insurance policies are typically divided into level term and decreasing term covers:

  • Level term life insurance. Such covers include a fixed payout amount, meaning your family will receive the same coverage amount, no matter when you pass away during the policy period. 
  • Decreasing term life insurance. In this policy, the payout amount will reduce over time. 

Benefits of Term Life Insurance

Term life insurance provides the following advantages:

  • Usually comes with a lower cost
  • Offers flexibility to choose the cover period
  • Simpler to understand
  • Ensures a large payout amount when choosing a level term cover
  • Perfect for protecting mortgage

Whole Life Insurance

Whole life insurance provides a lifetime cover. You don’t choose a period; the coverage lasts your entire life as long as you pay your premiums.

These are calculated based on information provided, including your age, health, and smoking status (more information on how your life insurance premiums are calculated here). 

Since you need to pay premiums for the remaining of your life, whole life insurance can become costly. On the other hand, it secures a more significant sum for your loved ones.

That said, a payout sum from a whole life insurance policy can be used to cover considerable expenses. You can also leave it as an inheritance. 

Benefits of Whole Life Insurance

The key benefits of a whole life insurance cover are:

  • Permanent life insurance coverage
  • Guaranteed payout after passing
  • Typically ensures a higher and levelled payout sum
  • May provide tax-advantaged estate planning perks

Over 50s Insurance Plan

Over 50s life insurance is a policy for UK residents aged 50 and more (the typical targeted range is 50-85). It works similar to other life insurance policies, requiring you to pay monthly premiums to stay covered. 

However, unlike traditional life insurance, you don’t need to provide an insurer with medical information to get acceptance.

This form of policy is often referred to as guaranteed acceptance. That alone is a massive advantage, although it’s important to note that the payout amount won’t be as substantial as in the case of a whole life insurance policy.

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The benefits of over 50s life insurance include:

  • Guaranteed acceptance for UK residents aged 50-85
  • No medical information is required to get acceptance
  • Lifetime coverage
  • Guaranteed payout
  • Ideal for covering funeral costs

Which Life Insurance Policy Should You Choose?

Given the benefits of life insurance policies available, the next question is about the preferred type of policy to choose. The final decision will depend on several variables and your individual needs. 

Generally speaking, whole life insurance is a better choice if:

  • You want to provide your loved ones with a guaranteed payout sum;
  • You want to leave your family a larger inheritance;
  • You wish to add additional benefits to your insurance policy.

On the other hand, you may decide to choose a term life insurance policy when:

  • You prefer a more affordable option when it comes to life insurance;
  • You want to protect substantial debts, such as a mortgage or car loan;
  • You want more flexibility with your policy.

As for the over 50s insurance policies, these are dedicated exclusively to UK residents over 50 who want guaranteed acceptance on their policy. 

Which one to choose then? That’s the question you need to answer yourself. Also, securing more than one policy might be a good idea. For example, many choose a term life insurance policy to protect their mortgage but also get whole life insurance to guarantee their family an inheritance once they pass away. 

Key Takeaways

While the primary benefit of life insurance remains the same no matter the type of your policy – it provides financial security to your loved ones if you pass away. Each comes with distinct features and therefore benefits one has to consider when looking for the best life insurance coverage. 

Essentially, it all comes down to your individual needs. For instance, if you’re looking for a more affordable option, term life insurance or an over 50s policy may be your preferred option.

On the other hand, whole life insurance provides a guarantee your family receives the money they need to carry on living when you’re no longer around. 

Use our Insurance Hero comparison tool to ensure you get the best policy. Using it, you’ll be able to compare policies offered by reputable UK insurance providers and decide which one is ideal for your needs.

Apply what you’ve learned about the benefits of life insurance policies, use our tool, pick your policy, and rest assured that your loved ones will be taken care of if you pass away. 


Do I need a life insurance policy?

Given the benefits of life insurance, the question should be if but instead why you need a life insurance cover. So why do you need life insurance? There are numerous reasons for that, with the most significant being:

  • You want to provide your family with the means to live if you pass away;
  • Have any debts in your name, such as loans or a mortgage;
  • You want to ensure your family receives an inheritance free of the inheritance tax.

Most importantly, life insurance will provide you with peace of mind your loved ones are taken care of in case something happens to you. Given how uncertain our lives can be, that’s a significant assurance to have.

What are the disadvantages of life insurance?

Although we believe that there isn’t such thing as ‘life insurance disadvantages,’ there are several things that may seem like one. These factors shouldn’t impact your final decision on getting a life insurance policy, but knowing them can be useful when considering different insurance coverages.

These factors include:

  • Term life insurance only guarantees payout if you pass away within a specified period. If not, the policy will expire, leaving you uncovered;
  • Whole life insurance can be costly as it requires you to pay monthly premiums for the remaining of your life;
  • Taking out a whole life policy when you’re young might lead to you paying more into the cover that it will pay out. 

How much life insurance do I need?

That’s the question many people ask themselves when deciding on getting their life insurance policy. Answering it might seem a bit intimidating at first. After all, there are numerous insurance options out there and, as we’ve covered, all of them offer different benefits. 

To decide how much life insurance to get, consider the following questions:

  • Do you have a mortgage?
  • Do you have other savings?
  • How much can you afford to pay for your policy?
  • Do you have children or dependants?
  • What is your health situation?

Depending on these, you can get an answer to which option is best for you. 

However, the best way to calculate your policy is by using Insurance Hero. Get your free quote today and see which insurers offer the best deal for your needs.