What is life insurance?
It's a type of insurance that helps to financially support your loved ones should you pass away. Life insurance pays out a lump sum to your family if you die or are diagnosed with a terminal illness during the term of the policy. How much it costs depends on things like your age, health and lifestyle.
How does life insurance work?
If your loved ones rely on your income, life insurance is designed to help give them financial security after you’re gone by helping to pay debts such as a mortgage or maintain their standard of living. You pay monthly premiums, and it will pay out a lump sum if either of the following two things happen during the term of the policy:
- You pass away
- You are diagnosed with a terminal illness
What types of life insurance are there?
Because we know everyone has different financial circumstances, we offer two types of life insurance:
Level term life insurance
Also known as level insurance, this is designed to pay your chosen amount of cover if you die or are diagnosed with a terminal illness during the policy. This remains the same for the duration of the policy (as do your payments) unless you change it.
It may be suitable for an interest-only mortgage as the cover amount remains the same, or if you want to leave a specific amount of money to help support your family.
Decreasing term life insurance
Also known as decreasing insurance, this is ideal if you want to take care of a repayment mortgage. Your amount of cover will reduce each month, to reach zero when your cover ends.
This works in the same way as the outstanding amount on a repayment mortgage with an annual interest rate of 8%.
Each type of life insurance is available as:
A single policy covering only one person
A tax-free lump sum is paid if you die or you're diagnosed with a terminal illness during the length of the policy.
A joint policy covering two people in a relationship
Only one lump sum is paid to the surviving partner if the other dies or is diagnosed with a terminal illness during the length of the policy. The policy will then end. Should you both die or be diagnosed with a terminal illness at the same time, there would still only be one lump sum paid out.
How is Over 50s Life Insurance different to our Life Insurance?
With Over 50s Life Insurance, you'll be covered for the rest of your life without having to go through any medical assessments. You're guaranteed to be accepted if you're aged up to 85 (81 if you smoke), and the insurance payout can be used for things like funeral costs. Whereas with our Life Insurance, if you die during the term of the policy, your chosen beneficiary will receive a lump sum to pay off things such as a mortgage, debts, bills and other expenses.Go to over 50s life insurance
Do you need life insurance?
Although it's not easy to think – or talk – about death, it's something you should plan for with your family. After all, it's only natural that you'll want your loved ones to be looked after. So, if you have anyone who depends on you financially, your life insurance could help give them that extra peace of mind.
It's up to you to decide if you need life insurance, but paying for monthly cover will help your family through financial uncertainty if the worst happens and you die or are diagnosed with a terminal illness. They will receive a lump sum to help cover bills and other expenses that can quickly become unmanageable at an already tough time.
If you prefer, you can place your policy in a trust, which will help look after your family's financial security. You can name who will receive the proceeds after your death.
Find out more about trusts
What does our Life Insurance cover?
Keep in mind that you won't be covered for all circumstances.
Lump sum payment
Life insurance will pay out a single sum of money while you're insured if you die or you're diagnosed with a terminal illness and are not expected to live longer than 12 months.
£10,000 advance payment
This is a payment of up to £10,000. It offers some financial help when a claim has been agreed but you're waiting on final payment. Once your claim has been approved, one advance payment of up to £10,000 could be released where the full amount is delayed due to legal requirements or other checks. Advance payments can take up to five working days.
Changes to your insurance
You can make changes to your cover in the following ways:
- Reduce the amount of your life insurance.
- Reduce the length of your insurance policy.
- Change your joint life insurance to one single policy or two separate policies.
- Reduce the amount of Critical 3 or remove Critical 3 from your policy.
For critical illness and terminal illness claims, you can be living anywhere in the world (however, your consultant must be in an eligible country). For a death claim, you can be anywhere in the world.
Home purchase insurance
If you're buying a property, you’ll be automatically insured at no extra cost from when you exchange contracts to when the purchase of your home is completed. In Scotland, this will be from when missives are completed for the property until the date you move in. Refer to the Life insurance key facts for more details.
Optional critical illness cover
When you buy our Life Insurance, you can choose to include Critical 3 for an additional cost. Critical 3 will pay out a single sum of money while you're insured if you’re diagnosed with one of three specified critical illness conditions and survive for 14 days after diagnosis. These include:
- Cancer - excluding less advanced cases.
- Heart attack - of specified severity.
- Stroke - of specified severity.
Mortgage guarantee for decreasing policies
If you choose decreasing life insurance that’s connected to your mortgage, and at the time of making a successful claim the amount of your life insurance is less than the amount left on the outstanding mortgage, AIG will pay the amount outstanding on your mortgage.
Terms and conditions apply
What we don't cover
Death or terminal illness outside the time of your policy
You're only covered for death or terminal illness while you're insured. If something happens at any other time, you won't be insured. Your policy document shows how long you're covered for.
Life insurance usually only covers death or terminal illness. If you can't work because of a disability, you won't be covered.
More than one lump sum payment for a joint life insurance policy
If you've chosen joint life insurance, your policy will pay out once. Once a life insurance claim has been paid, your cover will end.
Non-payment of policy premiums
Your claim won't be paid if you miss monthly payments for the duration of your policy.
Exceptions to mortgage guarantee
If you don't meet the criteria for the mortgage guarantee, and the annual interest rate on your mortgage is greater than 8%, the amount you receive for a successful life insurance claim may not meet the outstanding amount of your mortgage.
Death as a result of your own actions within the first year
You won't be covered if you die within the first 12 months of your policy or within one year after restarting your policy as a result of your own actions.
Specific illnesses under optional critical illness cover
If you choose to add Critical 3, specific illnesses may be excluded. This could be because you have a particular medical condition when you apply. Any excluded illnesses will be explained to you and listed in your policy.
When a claim won't be paid
A claim won't be paid if you don't:
- Provide accurate, complete and true information when you apply for your insurance.
- Provide medical or any other proof that may be required.
- Tell us about any wrong information in the policy summary or application details that you receive when you take out the policy.
Terms and conditions apply
How much life insurance do you need?
The amount of life insurance you need will depend on your personal circumstances. If something happens to you, the payout could help your partner or family cover costs when they need financial support at a difficult time.
Here are some things to consider when choosing your cover:
- If you have a mortgage or rent to pay
- Any debts, such as credit cards or loans
- Other everyday costs of living
- Whether you'd like to leave money to pay for your funeral
- If you want to provide additional funds for your children's school or university fees
Try our online life insurance calculator to help you work out how much life insurance you might need.Get started with our life cover calculator
Why choose Churchill?
Churchill Life insurance is provided by AIG. AIG Life Limited is an award winning specialist, receiving the 2019 Organisation of the Year award from Protection Review, and have 1.2 million customers across the UK.
Claims support fund
Up to an additional £300 for unexpected expenses as long as they're related to the cause of your eligible claim. It can be used for things like hospital car park charges and transport.
Support for children
The death of a parent or sibling can be one of the most devastating losses a child will ever face. If this happens, Winston's Wish gives bereavement support and guidance to children.
Winston's Wish is a non-contractual benefit which can be withdrawn without notice.
Unlimited, 24/7 access to a GP
Get Smart Health services at no extra cost, giving you and your family unlimited 24/7 access to health and wellbeing experts. This includes GP appointments over the phone or video call.
Find out more
Smart Health is provided to AIG customers by Teladoc Health. These services do not form part of your insurance contract and can be withdrawn at any time without notice.
Fixed monthly payments
If you don't make any changes to your policy, your monthly costs will stay the same.
98% of life claims paid out
Churchill Life Insurance is provided by AIG, which paid 98% of life claims in 2019.
Flexible length of cover
You can choose any number of years between 3 and 50, although your insurance must end before you reach your 86th birthday.
£10,000 advance payment
This is a payment of up to £10,000. It offers some early financial relief when a claim has been assessed and agreed as valid but the full amount is delayed due to legal requirements or other checks.
Optional critical illness cover
Our critical illness cover is called Critical 3 and is provided by AIG.
You can take this out for an additional cost at the same time as your life insurance. If you're diagnosed with cancer, have a heart attack or suffer a stroke during your policy, you'll receive a sum of money as long as you survive for 14 days after your diagnosis.
See the Life insurance key facts to check whether it’s suitable for you.
Things you need to know
- For level insurance, your policy may not completely pay off your outstanding mortgage unless you ensure that your amount of insurance is adjusted to match any new mortgage arrangements.
- For decreasing term life insurance, you should also check that the interest rate applied to your mortgage does not become higher than the interest rate applied to your policy.
- If you add Critical 3, this must be at the same time as you take out your Churchill Life Insurance policy. If you'd like to cancel your life insurance in the future, you'll also have to cancel your Critical 3.
- Life insurance isn't a savings or investment product, and has no cash value until a claim's approved. Keep in mind that inflation may reduce the value of your insurance.
- It's recommended that you review your insurance regularly and check that it matches your earnings and lifestyle, as you may have more or less insurance than you need.
Download Churchill Life Insurance policy documents
Remember, if you already have life insurance with us, the wording of your policy may differ from the one you’ll find here.
Churchill customers are introduced to AIG Life Limited (AIG) by UKI Business Solutions.
Information about our life insurance services
Updated July 19
AIG policies taken out after 22 July 2019
Can I have more than one life insurance policy?
Yes, you can have more than one life insurance policy, and they don't need to all be with the same provider. When you apply for a new life insurance policy, you may be asked whether you already have life insurance, as certain restrictions may apply.
Who receives the life insurance payout under this policy?
This will depend on how you set up the policy. In the event of your death, the payment will normally go to:
- Your spouse/partner if you have a joint policy with them.
- Your estate, unless the policy is in a trust or is owned by someone else.
- A trust, if that’s what you’ve specified. Trustees will distribute the money in accordance with your wishes.
- In the event of a terminal illness or critical illness claim the money usually goes to the person covered.
How much life insurance should I get?
You can choose how much life insurance you buy, subject to terms and conditions. You might want your policy to pay out the value of your mortgage, a specific lump sum for your dependants or provide enough to cover both.
To help you get an idea of how much insurance you might need, take a look at our cover calculator.
How long should my life insurance be for?
A life insurance policy that lasts for a fixed amount of time is called a term policy. How long you want your insurance to last for will depend on what you want to cover. If you have a mortgage, you may want to make sure the policy lasts as long as your repayments.
If you have children, you might want the payment from the policy to provide financial support for them until they've finished school, turned 18, finished university or can support themselves financially.
Your own age will probably have an impact on your decision too.
What is critical illness cover?
Critical illness cover is designed to pay out if you're diagnosed with a specific illness which would have a severe impact on your life. Churchill's critical illness cover, provided by AIG, is called Critical 3 and can be added for an extra cost when buying our Life Insurance. Critical 3 gives you an extra level of cover for:
- Specific types of cancer
- Heart attack
Please refer to the policy documents for more information.
When should I think about getting life insurance?
Life insurance is available for anyone aged 18+. But it's particularly important if you have a partner, any children, or other dependants who rely on your income to cover things like monthly mortgage payments or other living costs.
It's usually key milestones in life, such as buying a house or having a baby, which encourage people to get life insurance, but there's nothing to stop you getting cover earlier.
Do you need life insurance to take out a mortgage?
Getting a mortgage is one of the reasons people take out life insurance, as they want to make sure that their loved ones can afford the repayments if they're no longer around. But it isn't a legal requirement for you to have life insurance when you take out a mortgage. However, some lenders will insist you have cover. Others won't.
I have a pre-existing medical condition. Can I get life insurance?
Yes. Although if you have a medical condition before you take out cover, you'll need to let us know. Your situation will be considered before AIG provides a quote for your life insurance.
What happens to your life insurance policy if you miss payments?
If you miss a payment, you'll have 30 days from when it was overdue to pay it. After then, your insurance policy will be cancelled. If this happens, AIG will write to you and let you know.
You can restart your insurance for up to six months after the first missed payment, but you would need to clear any outstanding payments. There could be times when AIG reserves the right not to restart your policy.
When should you update your life insurance policy?
When you get life insurance, the amount and length of cover is based on your financial situation at that time – but these can change. So, it's a good idea to regularly review your cover to make sure it's right for you.
An example of when you'd need to update your policy could be if you've moved to a bigger home and your mortgage commitments have increased. The size of your family could change too. If you have children, you may want to review the amount of cover your policy provides. You might want to update your policy if there are any major changes in your relationships as well – for example, getting married or divorced.
Does life insurance cover Coronavirus?
Claims related to Coronavirus will be reviewed and handled like any other life insurance claim.