Life Insurance
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Getting the most appropriate policy, (taking all the variables into consideration) and doing it as cost effectively as possible can be more difficult than you might think. If you are absolutely sure of what you want and you don't require any advice, we can simply provide you with the best quote and submit your application when you wish to proceed. Of course the choice is yours, but, if you are not sure, for your own protection, we would urge you to seek our advice and allow us to give you the benefit of our expertise in this field. We take your personal circumstances, preferences and needs into account and tailor these to the best solution based on over 24 years experience, know how and continued professional development. Yes it may take a little longer to ensure it's right for you, but in our opinion, it will be well worth it and what's more, it could cost you less!
If you already have some life cover, we would recommend a review of its continued suitability as your circumstances may have changed. Moreover, life insurance rates are currently very competitive and you may be paying more than you need to for the cover you already have. Changes in your circumstances or a change in job could influence how much protection you need. Contact us today for a free consultation or obtain a quote from the "home" page.
Life insurance policies have been designed to provide protection for different purposes and they broadly fall into two family types. There are the term assurance plans that are characterised by providing cover for a specified length of time (or term) and the fact that they do not generate a cash surrender value during the term. Effectively they provide pure cover and since there is no investment content, the premiums are lower.
The second type is referred to as whole of life. These plans can be kept in force as the name suggests, for your entire life and as such, offer a guarantee to pay out because sooner or later we all die. These plans are characterised by the fact that they include an investment element and premiums are therefore higher however, they can provide a surrender value in the future should you decide to cancel your cover.
Different term plans are described as follows:
Family Income Benefit Assurance - instead of paying out a lump sum, this type of cover provides a tax-free annual income until the end of the term selected at outset. The annual income can be either level or increasing for the term of the plan. This type of policy is the most cost-effective way of providing protection for your family but it is often overlooked. In effect, it provides the financial protection required to meet the needs of a family and yet is considerably cheaper because the liability of the insurance company is continually decreasing during the term of the policy.
Level Term Assurance - premiums are paid for the term of the policy or until a claim is made. In the event of a claim, a tax-free lump sum is paid (the sum assured), by the insurer.
Increasing Term Assurance - Here the sum assured automatically increases each year with the premium (without the need for further medical evidence) to offset the effect of inflation and therefore protects the real value of the cover in force at the time of claim.
Mortgage Protection Assurance - Here the sum assured reduces in line with the outstanding balance of a "repayment" mortgage over the term of the policy. (Where you have an interest only mortgage the level term policy is most appropriate).
Renewable Term Assurance - a short term policy and therefore cheaper initially, and as the name implies, a guaranteed right to be able to renew the policy if you wish, up to the original sum assured without further medical evidence.
Premiums
Aside from whole life policies, premiums for most types of cover start from as low as £5 per month. What determines the cost is age, health, occupation and the term. Premiums for men tend to be slightly higher than women, due to the fact that women tend to live longer. Smokers will find term premiums more expensive as their life expectancy is often shorter. Finally, personal and family medical history naturally plays an important part in assessing the degree of risk dependent on the health condition that has been disclosed on the application form. The figures quoted by the life offices always assume standard rates. If you believe that standard rates may not apply to you perhaps due to health, occupation or pastimes, please contact us for assistance as we are able to access specialist insurers that may still provide you with the cover you require.
The menu approach to life assurance
We believe that policies that allow the policyholder to alter their policy (i.e. increase or decrease the sum assured, add or take off different types of cover, increase or decrease the term etc.) offer a far more flexible approach than policies that simply cannot be changed once they have commenced. The so called "menu" approach allows for far greater flexibility and has been available for some years and perhaps should be considered before you decide on a policy. If you think this flexibility might be important to you in the future then it's as well that you know now that it exists rather than start a plan that has little or no flexibility and regret it later.
Your duty of full disclosure
When applying for a policy (particularly critical illness cover) it is essential that you answer the questions as accurately as possible and above all, honestly. Please be aware that the insurance company is assessing the risk in good faith, based on the information that you give them, which, if this turns out to be false, could invalidate your policy. It is common prior to an underwriting decision, for the insurance company to contact your doctor for specific information that might relate to a condition that you have disclosed, but you cannot rely on them to do this as a matter of course. To see useful advice given by a sample insurance company on this subject please click on the following document. Insurance company advice
Finally, on the subject of disclosure, what to do if you feel particularly sensitive about disclosing certain information. Whilst it still must be disclosed, please be assured that you will be able to disclose this in writing directly to the Chief Medical Officer of the insurance company. Simply let us know that you wish to disclose something directly to the company.
Last but not least
Whatever policy you choose, you should always consider putting your policy in trust. This enables the insurance company to make a more immediate payment to your selected beneficiary(s) and can help save on unnecessary inheritance tax. Without charge, we can obtain the appropriate Trust Deed from the insurance company and provide assistance with its completion.
We are licensed to provide advice on whole of market term products.