Frequently
Asked Questions

FAQs

The need for life insurance

  • How much life insurance do I need?

    Some, and we’re not even thinking about any cover you might need for any business you’re involved with. However before answering that question, we need to think about when you need life insurance.

    You need life insurance to start now and last a long time, because you don’t want to be trying to buy life insurance after something bad like being diagnosed with cancer. This is why we sell life insurance that lasts up to 25 years, so it’ll be there when you need it.

    A lot can, and will, happen in the next 25 years, so it’s impossible to be precise about how much life insurance you need. And we have to remember that everyone is different therefore we can only provide general guidance.

    Don’t despair, get what you can now and review when something significant changes for you or we prompt you. Continue reading for the category that fits you best.

    In poor health

    We’re truly sorry to hear that. Depending on your condition, we may not be able to offer you cover. If so, we’ll still do our best to see you right by introducing you to specialists who will search the market for you. It’ll be a longer process, you might not get everything you want, and it might cost you more. However you probably appreciate the importance of cover more than most.

    Continue reading for the category that fits you best and let’s see where we can take you.

    Young, free and single

    Life is good, and your death a remote possibility. And should anything happen to you, no one is dependent on you. Except the someone who would have to sort out your affairs.

    You might want to leave something to your favourite charity, gifts for your friends and family, or pay for big goodbye party. Sadly the someone can’t do this until they’ve paid off your debts, for example credit cards or housing costs. If you do own a home with friends they’ll not thank you for leaving them your share of the mortgage.

    You might also meet someone and in the thrill of the relationship forget that you start to become financially as well as emotionally committed to each other. So preparing by buying some cover now won’t harm, though we don’t suggest you use the fact in a chat up line.

    In summary, think about what debts you have, then think what you’d like to leave to others, and then consider rounding it up for the just in case.

    With a partner

    Sharing your life is so exciting, and a shared emotional relationship with another human being can bring much joy. And soon it’s not just an emotional commitment, but a financial one as well.

    Do you share a home? Are you reliant on each other to cover the utilities, rent or mortgage payments? Do you want your partner to be able to continue living there should you die?

    Has one of you changed your career, earning less? Could you continue to enjoy the lifestyle you want if you were back on your own?

    And are you thinking about starting a family? You’ll want to provide cover for your children. Raising a child can cost up to £200,000 throughout their childhood.

    However will you remember to do it amongst all the other changes that come with having a child? Might your health change between then and now, making buying insurance more expensive or unavailable? The safe thing might be to start buying the cover now.

    In summary, think of your shared commitments such as your home, then think of the cost of your lifestyle and your earnings, and then consider topping it up if you’re planning to have a family.

    A working parent with a partner

    Children are such miracles. How do you equip those so precious and vulnerable to take on the responsibilities of the world? They need all your help. While money cannot replace you if you’re gone, it might enable your partner to commit all their time to your family, without having to go back to work. Or your partner might fund child care to help them share the load and try to continue their life. Raising a child can cost up to £200,000 throughout their childhood.

    And then there is your home. Do you want to pay off a mortgage, or provide a fund for rent and utilities?

    Looking ahead, even if you don’t grow your family, there may be university or helping them start their new home. You may even have time to think of yourselves and ensure there is enough for your retirement - whatever the circumstances.

    In summary, think of how much your children will cost, then think of what home they’ll live in, and then consider being selfish and adding a little for your life after children.

    A non-working parent with a partner

    Children are such miracles. How do you equip those so precious and vulnerable to take on the responsibilities of the world? They need all your help. While money cannot replace you if you’re gone., it could help your partner by enabling them to change their career to look after the children, or to pay for child care when they are working. Raising a child can cost up to £200,000 throughout their childhood.

    And then there is your home. Do you want to pay off a mortgage, or provide a fund for rent and utilities?

    Looking ahead, even if you don’t grow your family, there maybe university or helping them start their new home. You may even have time to think of yourselves and ensure there is enough for your retirement - whatever the circumstances.

    In summary, think of how much your children will cost, then think of what home they’ll live in, and then consider being selfish and adding a little for your life after children.

    A single parent

    Children are such miracles. How do you equip those so precious and vulnerable to take on the responsibilities of the world? They need all your help. While money cannot replace you if you’re gone, someone will take on care of your children, and they’d find it a lot easier if you leave them money to help them. Raising a child can cost up to £200,000 throughout their childhood.

    Sadly they’ll first have to pay off your debts, for example credit cards or housing costs.

    Looking ahead, even if you don’t grow your family, there may be university or helping them start their new home. And for you, perhaps a new partner at some time.

    In summary, think of how much your children will cost, then think of the debts you have, and then consider rounding up for whatever is round the corner.

    Empty nester, the children have left home

    So much free time, that precious commodity, where did it go? Children never leave home emotionally, and they may still depend on you for grandchild care as well as the Bank of Mum and Dad. There are still responsibilities, and the need to provide for them should anything happen to you.

    And if you’re lucky enough to have a partner and are building towards retirement, you should consider the scenario in your absence. Would the pension you are building up be enough for them? Should you top it up just in case?

    In summary, think of your ongoing commitments to your children and their children and how they could be replaced and what money it would need. And then also consider if you need to top it up to provide for your partner’s retirement.

    Older and wiser

    What’s it all about? Are you more or less certain about what the big plan is? Or is it more about helping out in any way you can? What existing commitments will continue after you die, and how much money will enable them to be fulfilled?

    And when you die, do you want to be able to cover the costs of your send-off with an insurance payout, what with the average price of a funeral being £3,737? Or perhaps you want to leave a bequest to a future generation or a charity?

    In summary, you’re at the time of life when you both have to think about what current commitments you have, and what commitments to the future you want to make.


  • How much cover do I need for my child?

    I’m sure you’ve seen scary figures such the average cost to raise a child in the UK is £230,000. We’re sure that you can spend at least this on your precious offspring. However, we think the figures from the Child Poverty Action Group are a better measure of minimum need.

    Their 2018 report “The Cost of a Child in 2018” gives the basic cost of raising a first child until the age of 18 is £122,017 for a lone-parent family. And if you also need to provide childcare then this rises to £199,265. 

    So depending on whether you have a partner or family that could provide childcare if you were no longer around then you’re starting at either about £120,000 or £200,000 per child. 

    The same report looked at whether the cost of second or subsequent children. Whilst some spending can be shared other items come in, such as the need for a bigger car. They concluded that for lone-parent families, a second child costs £81,750 without childcare, or £167,405 with childcare. Having three children or more costs £87,061 or £155,838 per child, respectively.

    So your total costs average about £100,000 a child without childcare, or about £180,000 each with child care.

    And this excludes supporting them post-18 at university or elsewhere, so you might top this up by a further £20,000 or so for each child.

    If this is getting scary again, remember that for existing children you have already spent some of that money getting them this far. We’re sure your bank account bears the scars. The Cost of a Child report in 2018 shows that spending isn’t even over time, with younger children generally costing more.

    However, unless you want to get really sophisticated, a rule of thumb might be that you should at least cover £6,000 times the total number of years to age 20 if there will be child care available, or £10,000 times the total number of years to age 20 if child care will have to be paid for.

    For example if you have 2 children aged 8 and 10 then the 8 year old has 12 years left until age 20, and the 10 year old a further 10. Adding these up gives 22 total years until both pass 20. So if there is child care available insure for 22 x £6,000 = £132,000, whilst if child care will have to be paid for insure for £220,000.

    Remember this is only a guide and based on average numbers, and you should bear in mind how your circumstances may differ.


  • How long should my life insurance last?


    You need life insurance to start now and last a long time, because you don’t want to be trying to buy life insurance after something bad like being diagnosed with cancer.  This is why we sell life insurance that lasts up to 25 years, so it’ll be there when you need it.

    A lot can, and will, happen in the next 25 years, so it’s impossible to be precise about how much life insurance you need. You can think about how long you’ll be responsible for your children, how long your mortgage will last, or how long until your pension kicks in.

    However, what if you have more children, extend your mortgage or have to change your pension arrangements? In an uncertain world it’s always best to be on the safe side.



  • Do many people take out life insurance?

    Yes. In 2018 over 2 million long-term insurance policies were bought (1). Most of these provided cover in the event of death, and some a benefit on illness or disability. Many of these policies were for couples, therefore the total number of people buying was nearer 3 million.

    So a lot of people bought life insurance last year, and many more will have policies they bought years ago. It may not be the topic of conversation down the pub, but it’s far more common than you might think.

    1: Swiss Re Term and Health Watch 2019.

Your objections overcome

  • Can I take out life insurance if I have health issues?


    Probably. A simple rule is that if you know when something is going to happen, then there’s no uncertainty and so no insurance. If a health condition means it’s highly likely you’ll die fairly soon then there is little uncertainty and little chance of getting life insurance.

    However the life insurance market does try and cover as many people as possible. Different Life covers many health issues on our normal prices, when other insurers would increase their premiums. For the most serious conditions we use the services of a specialist intermediary to ensure that you still get the best service possible.



  • Can I take out life insurance if my family has a history of health issues?


    Some insurers will ask how your parents and close relatives died, or whether they had any serious illnesses. They may then increase your premiums, or even refuse to cover you. 

    Different Life only asks about you. Not your parents. Not other close relatives. Only you.



  • Will I need a medical exam to get life insurance?


    Not necessarily, though it depends who you want cover from. We will cover you based entirely on what you tell us, which is why it’s important for you to always tell us the truth. In a few cases where we cannot offer you cover we will introduce you to a specialist, who may recommend an insurer that does require medical evidence.

    Other insurers have different requirements. This may be to see your medical records, or to have you examined by a nurse or a doctor. They are more likely to ask for further evidence if you have told them of a medical condition, you have asked to be covered for a large amount, or you are older.



  • What if I already have life insurance?


    Great, but is it enough? See How much life insurance do I need? to see if you need to top it up.

    As life insurance costs more as you get older, we don’t think you’d save money by cancelling your existing life insurance. So you’d want to keep it, unless you have other good reasons to replace it. If you are replacing your cover, don’t cancel your old policy until the new one has started; just in case.



  • If I have Death-in-Service, do I need more life insurance?

    Probably. Death-in-Service is life insurance provided by some employers, normally paying out between 2 and 4 times your salary. It’s great as far as it goes, which if you have a partner or dependents probably isn’t far enough.

    And if you change employer, voluntarily or otherwise, you’ll lose their Death-in-Service. So it makes sense to at least top up your Death-in-Service if you have it, if not treat it as an extra bonus on top.


Other uses of life insurance

  • Does my partner also need life insurance?

    Yes, and not just selfishly because it should come to you. If you lost your partner you’ll need to reevaluate your life plan. You will be entirely responsible for your commitments. Children, mortgage, building for your retirement, your legacy. It’d be a big ask, and you will need all the financial help you can get on it.

    It doesn’t matter if your partner isn’t earning, it just means that they are contributing more time into what’s important to you two. Time you would have to pay to replace. That is why your partner can buy cover from Different Life regardless of how much they’re earning.


  • Can I insure my business?

    Yes, you can insure both the profits and your stakeholding in the business. By insuring your key people, you can protect the business against the losses that would ensue if one of them were to die. Similarly, if you own your business with other people then, by insuring them, you can arrange to have the cash necessary for their dependents to be able to realise their stake in the business if they die.

    Our cover is not suitable for either of these purposes. We suggest you seek professional advice about the right structure, documentation and tax planning for you, and to keep reviewing it in future.


  • Can I use life insurance in Inheritance Tax (IHT) planning?

    Yes, though as with most tax planning, you need the right structure, correct documentation and then you need to keep reviewing it against future tax changes. Our cover is not suitable for IHT planning and we suggest you seek professional advice about what is best for you.


About the product

  • What is Life with Terminal Illness Cover?

    Life with Terminal Illness Cover is a life insurance benefit that pays a lump sum benefit when you die or are diagnosed with a terminal illness – where life expectancy is less than 12 months. There is no restriction on the use of the benefit, but it is often used to pay off a mortgage or provide for dependent children. You therefore set the Cover to finish after an agreed number of years.

    If you want to know more you can read our Life with Terminal Illness Cover Summary


  • Is the benefit subject to tax?

    Under current legislation and HMRC practice, benefit payable under our insurance is normally free from personal liability to income and capital gains tax, for UK residents. However, the benefit may be subject to inheritance tax unless you put your benefit in a suitable trust. We recommend you seek professional guidance because your individual circumstances can affect your tax position. Please remember that tax rules may change in the future.

  • Can I do good with my life insurance?

    Yes - if you’re with the right insurer. Different Life was founded to make a Difference by doing good. We donate one premium a year for all our policies to partner charities to help them with their great work.

    • Rosemere Cancer Foundation is helping rebuild their local cancer ward get with all the latest equipment.
    • Children of Hope is working with vulnerable and disabled kids in Uganda.
    • CLIC Sargent supports young lives against cancer in the UK.
  • If I decide to buy, can I change my mind?

    Yes. You can stop the cover at any time. In the first 30 days we will get a refund of the premiums paid to date, as long as you have not made a claim, after that there is no refund.

    You can also increase your Cover, subject to new questions about your health and lifestyle, or reduce the level of Cover that you have.


  • Can I change my life insurance later?

    Usually. To increase the amount of cover you have, or to extend how long it will last, the insurer will normally ask further medical questions about your health at that point. The increased cover will be more expensive due to your increased age, and may be even more expensive or even unobtainable if your health has deteriorated. It is a good reason to not skimp on the amount of cover you buy now.

    You will also normally be able to reduce the level of cover or how long it lasts, without medical questions. Insurers offering more complex life insurance with different options may also agree to change the options you select if your circumstances change.


  • How can I pay?

    You can pay using a credit or debit card, and payments should continue when you have a replacement card. You can also change the card you pay with through your customer portal on the website.

  • Aren’t there lots of different types of life insurance policy?

    Sort of. If we set up an insurance shop then there would be a display for policies that pays on death, another one that pays you if you’ve had a serious illness, and another one that pays an income if you can’t work. We currently only sell the first type so let’s look at that.

    On the policies that pay on death display you’ll find their main feature is, not surprisingly, that they pay out if you die. They pay to your estate, unless you have your policy owned by someone else or you put it in a trust, when they can pay directly to someone else.

    They only pay out if you die during the policy’s life. The policy could be for a duration set at the outset such as the next 25 years, or the policy could last as long as you live, normally described as a whole life policy. We sell the set-duration type if you’re aged 18 to 55, or the whole life one to those aged 56 to 80.

    Some policies, like our Life with Terminal Illness Cover, will pay out early if you meet their terminal illness definition. You can then use the cover to pay for treatment or drugs, or for end-of-life experiences. However if you do so there will be less left for the original reason you bought the policy.

    The amount paid could be the same at any time. This is called a level sum assured and this is what we offer. Other options are:

    • for the cover to decrease like the amount outstanding on a repayment mortgage; or
    • for the cover to increase, though the premiums usually increase quicker; or
    • for the amount to be paid as an income for the rest of the term of the policy.

    Policies only last as long as you pay for them, though some policies stop collecting premiums at some point. For example our whole life cover stops collecting premiums on your 90th birthday.

    Some policies cover two people, paying on the first to die. They are slightly cheaper than two separate policies, but we think two policies give double the cover and it’s hard to have too much cover.

    On nearly every point we’ve mentioned above there can be an additional variation or two. There are options for renewability, guaranteed insurability and divorce, there are helplines and other services, and there are premiums that are reviewable and/or pay-as-you-go. In the right situation each of these could be really useful, but in general we think they’re usually accompanied by a level of complexity and cost that most people can live without.

  • How is the cost of life insurance calculated?

    The cost of life insurance depends on the type of policy, your age, your health - including whether you smoke, how long the policy will last for, and the amount of cover.

    Actuaries, the professionals who calculate this sort of thing, need to look ahead to estimate the chances of people claiming in the future, or the rate of interest that can be earned on the reserves set aside to make sure all future claims can be paid. This makes working in an insurer almost exciting when, like us, the cost you pay for your policy is guaranteed not to change come what may.

About Different Life

  • Who is Different Life?

    Our official name is Different Life Management Company Limited and you can check us out at Companies House www.gov.uk.

    We are a life insurance intermediary authorised and regulated by the Financial Conduct Authority. Find us on the Financial Services Register by visiting register.fca.org.uk under the registration number 792843.


  • Can I trust my data with you?

    Yes. Please read our Data Policy which gives you all the details.

  • How do you select the charitable causes offered?

    Our rules require us to support charities within a number of sectors, and therefore we look for a range of different types of charitable cause. We look for charities ourselves and welcome suggestions from customers.

  • Who is the insurer?

    Covéa Life Insurance, a registered long-term insurer and part of the French mutual insurance group Covéa. The Covéa group has attained a Standard and Poor's 'A+ Stable' rating. Their website is www.coveainsurance.co.uk. Covéa Life Insurance is covered by the Financial Services Compensation Scheme (FSCS).

  • Can you advise me on what cover is suitable for me?

    No, we cannot provide advice or personal recommendations on what cover is suitable. It’s a regulatory thing.

    However, we think you’ll find all the guidance we provide sufficient most times for you to be able to decide for yourself. Remember, situations change and you should regularly review whether your cover is necessary or adequate for them, or whether it might need amending.