At LR Financial Services we have found that many people have heard about the life insurance policies and life assurance policies (often referred to as cover) and assume they are the same. However, this isn’t the case there is an important difference between these two types of policies. When arranging a mortgage, some lenders may require you to arrange life insurance for the loan, so that in the event of your death the loan is repaid. So, what is difference between life insurance and life assurance?
Life insurance: Will pay the Sum Assured (the amount of money you are insured for) if you die within the term of the policy, providing you are up to date with your premiums and the original application form was correct at the time of completion.
This type of policy is typically used to protect a loan or mortgage and once the policy reaches the end of its specified term, the protection ends.
Life assurance: Will pay the Sum Assured when you die. As it has no term or maturity date, it will pay the Sum Assured so long as the premiums are up to date and the original application was correct at the time of completion.
This type of policy, when written under trust, is typically used to protect your family from Inheritance Tax or to give your grandchildren a helping hand.
The next question is typically how much does life insurance cost? Well, that depends on your age, life style and general health, but we find that life insurance can be very good value for the amount of protection you get and the peace of mind received. We also believe that it can be one of the best weapons in your financial arsenal, as it gives you the ability to provide an income for your loved ones when you are no longer around to provide it.
Can I change my Life insurance provider once I have taken out the policy?
You can’ t switches your policy over from one provider to another, you will have to close the policy and open a new one with the new provider. This means that you will lose all the benefits of that policy you have been paying into.
Can I add extras onto my policy such as critical illness cover?
Unless you took out the option to change the policy when you first started the policy. It is unlikely they will allow you to change the terms of the policy. We recommend that you talk to one of our advisers to find out what options are available to you.
How long does it take for my policy to come into effect?
It will depend on underwriting, there are four options available to the provider.
1) except on normal terms. This means that the answers given on the application form are sufficient for the provider to make a decision; and or
2) Request further medical informant, this means that the answers given on the application form are insufficient for the provider to make an instant decision and request further clarification from your doctor. Depending on the answers given from your doctor the provider may increase the premium, reduce the sum assured, postpone the decision to insure or decline to insure.
3) the provider may request medical evidence their fore request that you take further medical tests. Then depending on the results given from your tests the provider may increase the premium, reduce the sum assured, postpone the decision to insure or decline to insure.
I have been diagnosed with a critical illness. Can I still get cover?
This depends on what you have been diagnosed with. Most providers may put a clause in excusing a pay-out from your critical illness, that is why we advise that you talk to an adviser before taking out a policy.
Would it be possible to get family cover?
You are unable to insure the entire family. But you can still take out cover on each individual person in the family. To make sure optimal cover is provided.
Can I take a policy out on my partner?
Yes, this is called life of another. It allows you to insure someone else. You will pay the cover and you are able to make yourself the beneficiary.
How many providers will you check?
As independent financial advisers we have the ability to choose from the hole of the market. This means we are able to look at all the providers on the market to give you the best deals on the market.
How is it, you can get better deals than what is on the high street?
The reason we are able to get a better deal is because most providers are not on the high street. This means they only deal with advisers. We are able to such through more options.
Is it advisable to take out more than just life insurance with my provider?
We would advise that you shop around for your policy’s as and when you need them. Typically, you don’t get loyalty points with providers anymore.
My partner has passed away how do I claim his policy?
We would advise on the prosses to make the claim. Talk to adviser about the specific details of your case.
My life style has changed since I took the policy out should I notify my policy provider?
Yes, under the terms of up most good faith. Policy provider relies on the applicant to answer questions truthy. That is why they reserve the right to decline the payment of the sum assured if you have with healed information on your application.
I can’t efforted the payments on my policy can I reduce the payments or do I need to take out a new policy?
You would need to discuss this with your provider. Or you can get your adviser to deal with the request on your behalf.
Is it possible to change who my beneficiary is on my policy, or will I have to take out a new policy?
If the policy has been written in trust then you can change who the beneficiary is of the trust. Otherwise the policy will pay out into your estate.