With Level Term assurance, the sum assured remains the same over the policy term, which can be linked to a specific period of time (e.g. dependent family reaching a certain age, a mortgage loan), producing a lump sum payout. The policy will terminate in the event of a claim, or at the end of the policy term with no cash value.

Decreasing Term differs from Level Term in the sense that the sum assured reduces throughout the term of the policy. It is often used for protecting a repayment mortgage on the basis that the sum insured will always be sufficient to cover the mortgage balance at any point during the mortgage term. Cost wise, premiums are cheaper than a level term policy, where the sum insured remains the same throughout the policy term due to the sum insured decreasing.

Family income benefit protection is designed to replace income over a specific period of time (for example, while children are financially dependent) by paying out an amount - pro rata at the time of claim - year-on-year until the end of the policy term. As it’s not paid in a lump sum, it makes it one of the cheapest forms of life protection.

For example, if Family Income protection is insured at £200,000 over a term of 20 years and a claim is made in year 10, the policy would pay out an annual income of £10,000 per year for the remaining 10 years, totalling £100,000.

Whole of Life protection is designed to pay out in the event of a claim, whenever this occurs in a person’s lifetime, and is not limited to a specific policy term. It is the most expensive form of cover, and is often considered to provide protection for the cost of funeral expenses, or to cover an inheritance tax liability.

Insurance providers can also include a terminal illness benefit, which pays out before death if you are diagnosed with less than 12 months to live.