It’s important to select the right insurance for your needs and think carefully about what you want to cover and the policy term.
Here are a few things to consider.
A level term insurance policy is where the amount of cover and your monthly payments stay the same for as long as the policy is in place. So, if you were to die during a fixed period (the term), your family would be paid a pre-agreed sum of money. If you were to die after this period, there would be no payout.
Level term cover can help pay everyday living costs, childcare, or an interest-only mortgage – where the amount you owe stays the same, and the balance needs to be repaid when the mortgage ends.
A decreasing term insurance policy is where the amount of cover reduces throughout the term of the policy. So, if you were to die during a fixed period (the term), the amount paid to your family would depend on how long has passed since the policy was taken out. If you were to die after this period, there would be no payout.
Decreasing cover is often purchased to help clear a specific debt, such as a capital repayment mortgage. As this type of debt decreases over time, so will the amount of insurance.
A joint life insurance policy covers you and another person, meaning there’s only one monthly insurance payment for you both. You can take out a joint policy for level term and decreasing term life insurance, and the same conditions apply.
If you’re part of a couple, a joint life insurance policy could be a cheaper alternative to help pay off your mortgage or protect your family.
However, there is only one payout from a joint policy. If one of you dies, the surviving policyholder will need new cover.
Before considering level or decreasing term cover, it’s important to work out how much life insurance you may need and what you want to cover, as every household is different.
If you need any help with life insurance, you can chat with one of our financial advisers. They’ll be happy to recommend a policy and level of cover that’s right for you and your family.
Our protection advice is available, without a fee, to UK residents over 18, who hold an HSBC current or savings account.
HSBC Life Cover is provided by HSBC Life (UK) Limited. Terms, conditions, limitations and exclusions apply.
