|
FREQUENTLY ASKED QUESTIONS
WHAT TYPE OF COVER DO YOU REQUIRE?
Single life policy
If you choose single life cover, only you will be covered.
Joint Life Policy
If you choose a joint life policy, both yourself and a partner will be covered but the policy will only pay out once. This would be when the first of you needs to make a claim on the insurance. The plan will then end and no further benefit will be paid.
WHAT TYPE OF PRODUCT DO YOU REQUIRE?
Term Assurance
Level Term Assurance is the most basic type of life assurance. You pay a fixed monthly premium and the
amount of life cover – also known as the sum assured – is guaranteed for a fixed term. If you make a
claim during the term, the sum assured is paid out as a lump sum.
Convertible Term Assurance
These policies allow conversion, without further medical evidence, to a different
type of policy from the insurance company’s range. These may include whole of life,
endowment, a further term, unit linked or Family Income Benefit.
Mortgage Protection Insurance
This type of insurance, also known as Decreasing Term Assurance, is designed to cover a
repayment mortgage and takes account of the fact that your mortgage debt becomes smaller
over the years. You pay a fixed monthly premium but, instead of the cover remaining level,
it gradually reduces over the term of the policy, remaining broadly in line with
the amount outstanding on the mortgage over the term. The reducing cover means
that this type of policy costs less than Level Term Assurance.
Family Income Benefit Insurance
As its name suggests, a Family Income Benefit policy pays out a regular tax-free
income for your dependants for the remainder of the plan term rather than a lump sum,
should you claim during the term of the plan. The amount of income usually
remains level over the term, although you can request that benefits increase in
line with inflation as an optional extra. As an example, if you select a £15,000
per annum family income benefit plan over 25 years, and die at the end of year
10, then your dependants will receive £15,000 every year for the remaining 15
years of the term (£225,000 in total).
WHAT BENEFIT TYPE DO YOU REQUIRE?
Death Benefit Only
Payment of a lump sum (or income, depending on the plan) upon the death of the life assured.
Critical Illness Only
Payment of a lump sum in the event of a qualifying illness being diagnosed, e.g. certain cancers, heart disease or multiple sclerosis. You can take out critical illness cover (sometimes known as ‘dread disease’ cover) on its own or in addition to life assurance (see below).
Death or Earlier Critical Illness
Payment of a lump sum in the event of either death or critical illness. The policy pays out on the first event and then ceases.
PREMIUM FREQUENCY?
Monthly
Pay your premiums monthly by direct debit. This is the most commonly chosen payment option.
Annually
Pay your premiums annually by direct debit or by cheque.
TERM IN YEARS?
This should be the period that you want the cover to last for.
PREMIUM I WISH TO PAY?
With this option, each provider will calculate how much sum assured is available
for the selected premium.
AMOUNT OF COVER I WANT?
With this option, each provider will calculate how much it will cost to secure
the sum assured selected.
INCREASING BENEFIT?
This allows the sum assured to be indexed each year. This is particularly useful
to avoid the sum assured being eroded by inflation.
DO YOU WANT WAIVER OF PREMIUM COVER?
For a small additional amount on your premium, you can have the security of
knowing that your premiums will continue to be paid in the event of long-term
ill health, whether through sickness or an accident.
|
