Life Insurance - Cheap Mortgage Deals

Before taking out a life insurance policy there are a number of things you must consider. One of the most important factors is to decide what you want from the policy and how much you can afford to pay in premiums.

Clearly, if you have a family who are fully or in part dependant on your income, it is important to provide for them in the event of your death. Secondly, a policy can be a means of saving and can ease the process of obtaining a mortgage on a property. There are two main types of life insurance that cater for all of these requirements.

Firstly there is 'Term Life'. This is sometimes also known as a 'Protection Only' policy. This insurance policy will only pay out in the event of your death during an agreed specified period. It is generally the cheapest form of life insurance and will guarantee your family either a lump sum or a regular income if you die. There are numerous variations of 'term life' insurance. Some specialise in set premiums that do not change for the duration of the policy. Some policies have premiums that increase with the age of the person insured. Some policies can be converted into other insurance products such as endowment policies without penalty - and so on.

The second generic type of life insurance is referred to as 'Investment Life Insurance'. These not only provide death cover in the same way as 'term life', but also contain a savings element that can be cashed in during the life of the policy holder or holders where it is a joint policy covering a husband and wife for instance. This type of policy includes the endowment plans and 'whole life' insurance policies. Most personal pension schemes and stakeholder schemes are built around investment type life policies and people often take these out to cover the final payment of a mortgage in the event of the death of a policyholder or when the policy matures.

This second type of life insurance is naturally the more expensive, because it provides the extra benefit.

Every insurance company that provides a form of life insurance cover must have the authorisation of the Financial Services Authority to ensure that the provider is solvent and properly administered. Additionally, any individual providing specialist advice about investment life insurance must be authorised by this Authority.

Life insurance advisors, who specialise in offering life policies, are either 'tied' meaning that they can only sell the products of the company for which they work or are affiliated to. Or they may be 'independent' meaning that they must be a qualified and accredited Independent Financial Adviser. These advisers are allowed to sell the products of any company.

When you decide on which type of cover you require, there are a number of questions that you will be required to answer. Most important is your health. Your medical history and that of blood relatives may be required. Life insurances will exclude cover for death from existing conditions of illness and you may be required to pay for a medical examination. If you are a smoker, you will almost certainly pay higher premiums and death from a smoking related illness may be excluded. If you have a hazardous occupation or engage in statistically dangerous sports or hobbies, your 'insurability' will be affected.