Life Insurance

Term Life.
Basically, this is the cover that will provide either a lump sum or an annuity to your dependants should you die before the pre-specified fixed term of the insurance. It is the cheaper option in respect of premiums payable and does not represent a form of financial savings or investment. There are variations of this type of policy. Some have set premiums that do not change for the duration of the policy. Some policies have premiums that increase with the age of the person insured and some policies can be converted into other insurance products such as endowment policies without penalty. Your specialist protection insurance broker will provide you with more detailed information on the products available and should undertake independent research based upon your requirements.

Investment Life Insurance.
This type of policy, not only provides death cover, but will also provide a form of saving that can be capitalised upon at any time during the period of the policy. These insurances include endowment plans and ‘whole life’ policies and once again there are many variations available. Naturally because of the savings element, this type of insurance is more expensive. Only companies that are authorised by the Financial Services Authority (FSA) can provide the investment form of life insurance policy. This is to ensure that the company is in a position to meet any claims and that it is properly administered and not mis-selling. An individual providing advice concerning the purchase of such policies must also be registered with the FSA. Advisors are either tied to a particular company which means that they can only sell their companies products, or must be ‘accredited independent financial advisors’ and can sell the products of any investment company.

When you have decided on which type of policy is right for you, you should be aware that there will be a number of questions you will be required to answer. The cost of the premium will depend on a number of things such as your medical history and that of your parents and grandparents. You will normally be required to undergo and pay for an independent medical examination (not your own G.P.). Your policy will normally exclude cover for existing medical conditions and will also penalise you if you are a smoker or have a hazardous occupation or engage in dangerous pastimes.

As with all major purchases, it pays to shop around when buying something as important as life insurance. Do look for a specialist protection broker to obtain the best service – for a free quote please use the quote button above.