Life insurance is about providing some financial security for people who depend on you if you died. (So if you don't have a partner, children, or other dependants, you may not need life cover.)

To make sure you buy the right amount of cover, with the right terms and conditions, you should consider getting some advice.  Our advisors at DFC Money Solutions will assess what your family may need, and then shop around for the cover that suits you best.

Always answer questions as best you can and disclose any existing medical conditions when asked. If you don't give the full facts, you could invalidate your policy and the insurance company won't pay out.

There are two main types of life insurance: term insurance and whole-of-life insurance.

Term insurance (also called term assurance) pays out only if you die within a certain term, and whole-of-life insurance pays out whenever you die. Some whole-of-life policies also contain an investment element to them, but such investment-type policies cost a lot more than protection-only insurance.

Critical illness cover - Critical illness cover (CIC) pays out a lump sum if you are diagnosed with certain illnesses. The illnesses covered will be specified in the policy along with any exclusions – these differ between insurers. CIC policies usually only pay out once, so are not a replacement for income. Critical Illness Cover is designed to help cover those critical illnesses which could have a severe impact on your lifestyle.

Many people buy CIC when they take on a major commitment such as a mortgage. This is something that our mortgage advisers at DFC Money Solutions will discuss with you.

Payment protection insurance - Payment protection insurance, or PPI, is insurance that will pay out a sum of money to help you cover your monthly repayments on mortgages, loans, credit/store cards or catalogue payments if you are unable to work. This could be because you have an accident or sickness, or become unemployed through no fault of your own.

This means that the insurance company will pay the monthly repayments (or a percentage of them) on your behalf for a fixed period of time if you become unable to work. It is sometimes known as ASU (accident, sickness and unemployment) insurance, Account Cover or Payment Cover.

PPI can provide worthwhile cover against unexpected changes in your personal circumstances, but bear in mind its limitations and exclusions.