Life Insurance Protection For A Large Family

Historically, the common triggers for taking out life insurance protection were significant life events, like having a baby, taking out a mortgage or losing a loved one.

However, over the past two years because of the impact of the COVID-19 pandemic more and more people are considering life insurance for the first time.

For a large family such as mine the need for financial protection is often even greater. If anything were to happen to either myself or my partner, how would we cope long term?

Why is life insurance is a good idea?

  1. To cover the monthly mortgage repayments (and ensure we can remain in the family home)
  2. To cover rising living costs (food shopping, clothing, fuel, leisure activities, mobile phone)
  3. To cover household bills (gas, electricity, water, broadband, council tax, home maintenance costs)
  4. To cover additional childcare fees
  5. To provide an inheritance for loved ones
  6. To cover rising funeral expenses

Often people put off taking out life cover for a day in the future. A common reason people delay taking out life insurance is because they find the insurance jargon confusing.

In the below article, we unpick the common terms which are often misunderstood, helping you make an informed decision on whether you need life insurance and which policy type is most suitable…

Sum assured

The sum assured is simply the term used by insurers to describe the cover amount.

The higher your sum assured, the greater the monthly cost of your cover because the risk to the insurer is heightened.

As a result, it is a good idea to take your time and accurately calculate the sum assured you need to ensure your dependants are not financially vulnerable.

The key considerations are the size of your remaining mortgage, the cost of your family living costs, whether you receive any cover through your employer and the age of your children (or put another way, how long until the kids are financially independent).

If like me, you have a large family with young children who depend on you, this could be a significant sum.

Award-winning UK life insurance broker Reassured have compiled this in-depth post examining the average cost of life insurance in the UK which may be of interest. Use their life insurance calculator to help you work out your necessary sum assured.

The monthly premium

A life insurance premium is the fee you are charged by the insurer each month to receive financial protection.

A premium is calculated by the insurer based on the level of risk you pose. The greater the risk, the higher your premium. Your age is one of the key cost factors, as a result, the younger you are at the point of application, the cheaper your premium will be.

If you are in early adulthood, a non-smoker and without any pre-existing medical conditions, you could secure £200,000 of cover for approximately 20p a day.

The policy term

The term is the period of time that a life insurance policy protects you. You could take out a decreasing term policy with a 35-year term, to cover you and your family until your repayment mortgage is paid off and the kids have left home.

If is important to understand that term-based cover (level and decreasing term) has a specific start and end date. Therefore, it is possible to outlive your policy and not ever receive a pay out from your selfless investment. 


As mentioned above the cost of your premium is calculated based on the level of risk you pose. As a result, it can be tempting to withhold key information during the application in order to secure a lower premium.

In the insurance industry this is known as non-disclosure and is never a good idea.

If it transpires that you were not open and honest on your life insurance application, it could jeopardise a future claim. As a result, it is always best to be 100% honest during the application to ensure your investment is not wasted and your loved ones left exposed. 

 Life assurance

You may have heard of the term life assurance and wondered how it differs from life insurance? Often these two terms are used to mean the same thing, but in reality, there is a key difference.

Whereas life insurance pays out if you pass away during the policy term, life assurance pays out when you pass away.

Whole of life and over 50s plans are examples of life assurance and there is no set term period. These policies guarantee a pay out when (not if) you pass away but will be significantly more expensive than term-based cover.

Life assurance is usually better suitable to those in later life looking to cover funeral costs or to provide an inheritance. Because the premiums have to be paid for as long as you live (and no one knows how long this will be) it is possible to pay more into a life assurance policy that it will ever pay out.

Waiver of premium

waiver of premium is an additional benefit which can be added to some policies for an additional fee. Its purpose is to ensure your life insurance policy remains valid if you are unable to work due to illness or injury and are unable to keep up with your monthly premium payments.

Without a waiver of premium benefit in place, failing to pay your premiums will result in your life insurance being cancelled and your loved ones being unable to claim on your policy.

Impaired risk

Within the life insurance sector, a non-standard applicant is often referred to as an impaired risk. Commonly someone who has suffered or is still suffering from a pre-existing medical condition will fall into this slightly crudely named category. 

Being classified as an impaired risk means you will most probably be charged more for your monthly premium. However, it does not categorically mean that you cannot secure affordable life insurance.

It is important to compare quotes from a range of insurers as their definition of what is deemed impaired (and therefore the cost) can differ.

In conclusion

The last couple of years have been extremely challenging for many, both from an emotional and an economic perspective. Uncomfortable as it is, it has also forced many to consider how our loved ones would cope if anything were to happen to us.

It goes without saying that a life insurance pay out could never replace a parent. That said, it could at least lessen the financial burden on your family as a very difficult time.

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