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Life Insurance Advice

Below are just a few key points that you should always bear in mind when looking for life insurance;

  • Term life insurance policies may be cheaper than whole of life policies but they only offer you cover for a fixed period of time, and as you get older and your health declines you may find it difficult and very costly to renew your policy.
  • Term life insurance policies only pay out if you die during the lifespan of the product – in all likelihood you will out survive the term of the product and in this instance you will receive nothing. You are then faced with several options – renew or take out a new policy (this can be expensive), or carry on with no life insurance.
  • Whole of life assurance policies may be more costly but they offer a guaranteed payment when you die (assuming there are no exclusions that can be applied).
  • Whole of life assurance policies offer further peace of mind in that they are ongoing – you don’t have to renew, once you get past 50 this is very important as insurance costs increase with age and health and you can be left with very few life insurance options open to you.
  • Decreasing term policies are the least expensive and may be best suited to you if you simply wish to ensure you have financial provisions in place for fundamental debts such as your mortgage or your children’s education.
  • Many people believe that if you are a couple it is cheaper to take out a joint policy – this is very far from true and often it is more cost effective and you get much better cover if you take out individual policies.
  • Always check your exclusions and ensure that the information that you submit is 100% correct. Life insurance companies must be informed immediately of any changes in your circumstance or life style – no matter how small.
  • All insurance companies are required under the regulations of the Financial Services Authority to provide a “key facts” document. This is a very useful piece of information and you should use it to not only compare and contrast the different life insurance policies that are available but to also help you identify which one is the best for you.
  • It is highly recommended that your life insurance payment should go into a trust. Not only can you avoid inheritance tax buy doing this but you can determine who will benefit and by how much. All of this can lead to a much speedier settlement.