As part of your life insurance application, you’ll choose an amount you’d like to be covered for so if you die this will be the cash lump sum your loved ones receive.

Your age at purchase will affect your payout because the older you are the lower your maximum payout will be:

Age at next birthday	Up to 40	41-50	51-55	56-60	61-65
Minimum Cover	£40,000	£20,000	£10,000	£10,000	£10,000
Maximum Cover	£750,000	£500,000	£300,000	£125,000	£75,000

It also depends on the type of policy you’ve taken out.

Level term life insurance payouts

If you’ve decided on a level term life insurance policy, the lump sum paid to your beneficiaries stays the same, no matter when the claim is made.

Decreasing term life insurance payouts

If you go for decreasing term life cover, your payout goes down each month, in line with an annual interest rate of 6%. This is similar to the way a mortgage value decreases over time as you pay it off.