Life insurance is about as simple as insurance gets, the title life insurance explains clearly what it is, which is insuring your life. If you were to die your cover will pay out a specified lump sum of money. Unlike other health related insurances, there is no long list of criteria that needs to be met when the insurer decides if you can claim: because you are either dead or you're not.

For many it is a form of insurance worth taking in to consideration, so here is a list of the policies that are on offer are, you will find that there are three types of life insurance which are level term insurance, decreasing assurance term, and whole-of-life insurance.

Level term insurance is taken out for a specified period of time, which is known as the term. The term is usually set according to the length of time that the consumer wants to be covered. They may base this on the period they expect their family to be financially dependent on them, or the term of their mortgage. The lump sum that level term assurance pays out remains the same throughout the term.

For decreasing term insurance the sum the insurance pays will fall over time. This is so that it can be bought in connection with a repayment mortgage where the amount the individual wants to cover gradually reduces in line with the debt. Because of this, decreasing term assurance is usually cheaper than level term assurance.

Whole-of-life insurance pays a guaranteed amount when you die and there is no specified term. However, the premiums for this type of insurance can change. A proportion of the premium you pay is invested and its growth helps keep the premiums low. However recently there has been a sharp increase in increases in whole-of-life premiums. These polices are often used as part of inheritance tax planning and you should consult a financial adviser before buying one.

When it comes to picking a policy you need to decide what you want the insurance to do. If you want it to pay off all your debts, including a mortgage, and provide a good standard of living for your dependents then you should calculate the cost of this when you buying a policy.

However if you find that in the future your costs such as debts like your mortgage will fall or be paid off and your children would be financially independent, you could reduce the cost of your life insurance with a decreasing term assurance.

However you should think about other costs your insurance might have to cover, for example funeral expenses. As you may find that you have other insurance polices or employee benefits that provide that if you die. So take that into consideration to reduce the cost of your cover.

Many people already have 'mortgage term insurance'. But usually, these policies are sold to people when they take out a mortgage. But it simply covers the value of the mortgage, and usually nothing more. If you do have it, then you can subtract the cost of your mortgage from the amount of life insurance you need to buy. If you just impose some relatively simple measures it can help you to greatly improve the value you can get from life cover.

You will also notice that couples are often offered joint life insurance polices. This means the policy will out the same sum if either of them dies. However, this is only suitable if both parties involved need the same level of cover. Also the joint cover is often only slightly cheaper, if at all, than two single life policies with the same sum assured for each. So if you both were to take out two separate policies instead of a joint policy it could mean that, if the very worst were to happen and both parties died, the dependents would get twice the pay out. And so it is something to consider whilst deciding which type of life insurance you should have.