Life insurance is a contract between a policyholder and an insurer. In return for premiums, the insurer agrees to pay an agreed sum to the nominee if the insured person passes away during the policy term, or on the other events the policy describes.
Policies broadly fall into two groups: those that provide cover only, and those that combine cover with a savings or investment element. Costs, benefits and conditions differ between the two, so the policy document says more than a product label does.
The cover amount is the sum payable, the policy term is how long cover lasts, and the premium is what is paid to keep the policy active. Because prices rise over time, a cover amount that looks adequate today may buy less in future, which is one reason people revisit their cover as their circumstances change.
Dhimson Cover provides general information only. We do not sell, arrange, compare or recommend any policy. For advice about your own circumstances, speak to a suitably licensed professional.
Key points
- Cover amount, policy term and premium are the three basic building blocks
- Cover-only and savings-linked policies work differently
- Exclusions, waiting periods and the claim process are set out in the policy document
- The nominee's details should be kept up to date
- Health and lifestyle questions need to be answered fully and accurately when applying
General information only — not financial, legal or tax advice. Dhimson Cover does not sell, arrange, compare or recommend any product. Rules, terms and conditions differ between providers and change over time, so always read the provider's own documents or the official source.