Life Insurance Cover – ABC

Summary
During the “Credit Crunch” Protection Insurance has been a useful product, will it become more popular? The right moves are at last being made by the insurance market. We hope they will be successful. This article gives you the facts.

Not manyexpert financial advisers would disagree that protection insurance should be the basis of most peoples financial planning whether it be guarding against the damage of early death, accident, long term illness or (particularly now with the arrival of the credit crunch), cover for unemployment.

Life assurance is rightly the bed rock of financial planning whether it be put in place to protect your home owner loan or supply a tax free lump sum for your loved ones in the event of your death. Regrettably, some other brands of protection insurance have a less enviable reputation. Payment Protection Insurance Cover has a reputation for being miss-sold and critical illness cover has formally suffered from extensive policy exclusions which allowed the insurers to refuse a huge amount of claims, even if they seem valid.

But last month a shimmer of light emerged when Norwich Union gave out its 1st 1/2 figures on the resulteffect of claims on its critical illness cover. These figures appear to imply that at last the problem of inadvertent disclosure of health particulars when the policy application is completed, is being resolved.

A little while ago critical illness insurance claims were being repeatedly refused on the merest suggestion that the client had omitted any slight medical detail – even a foot infection or a sore throat! According to the figures presented by Legal and General, their claim refusals have come down sharply from 6.5% the previous year to 1.6 per cent in the last six months.

How did this come about? LV, Scottish Equitable, Norwich Union, Scottish Provident, Axa, and Friends Provident  have launched a range of changes intended to diminish their refusal rates. They start off with an absolutely clear explanation of the importance of complete health disclosure right down to when they last visited their Doctor no matter how minor the reason. And some life insurance quotes such as Axa get a medically trained person to phone each applicant to discuss their medical history in more detail. Then when the insurance policy goes on risk, some insurers are telling again the insurance holders of the importance of full health revelation and giving them the opportunity of correcting or adding the details on their application form.

If the additional details are assessed as increasing the insurer’s risk, then the cheapest life cover insurance company will certainlywithout doubt put up the monthly payment – but that’s definitely far better than paying the original payment for years and then getting a claim refused.

The insurance companies should have taken action years ago as their slowcoach approach has dented the people’s perception of protection insurance. Nonetheless there is an definite need for protection insurance so let us pray that it achieves the status its so correctly justifies.

Summary
It is always sensible to know just what you are looking for in the way of insurance cover as only you understand your own position.  We highlight what you need to be aware of and how to maintain it after you have it.

Ian Marsh, a Director of investments at Lancaster-based financial adviser Peel Townsend Financial Services, cautions that it is very shortsighted of people not to have Life Assurance and/or Critical Illness Cover as he maintains that life has two main hazards – either living too long and passing away too soon.  “Its absolutely vital to have some insurance cover in place – especially if you have got small childern,” he says. “These days you must  asemble your own little fortress because nobody else is going to do it for you.”

Greg Suttcliffe at Bestdeal says now is the ideal time to invest in such plans as there are some very competitive premiums around owing to the intense vying for business within the insurance market. “The cost of life cover has dropped – reduced by about 42% in four years. It has never been as cheap,” he says. “The critical illness insurance market paid out on eighty four per cent of claims in 2007 – rising from seventy nine per cent  the during the last year.”
Always check what insurances you already have before you take out any more.  Do you already have investment policies or does your works pension fund give you any other cover?

The best way to assess how much insurance you need is to calculate how much you would want to retain the same level of living over a year and then multiply it by 24 years.  The minimum amount needed should settle all debts and and leave a lump sum for your family.

Obtaining the best deal

When making a decision on your insurance cover it is very necessary to read the manual that many insurance companies have of the illnesses and conditions that they cover. It will catalog everything and should be clear-cut and simple to comprehend.  You will also want to look at the documentation of the crutial features of the policy which will incorporate all exclusions and benefits.

When a person takes on the responsibility of a home loan they are normally counselled to take out critical illness insurance but should look around and not just take the first insurance policy offered.

If you commence paying these premiums when you are younger they are considerably cheaper, very different to leaving it until you are older, when the policy increases quite markedly.

Cheap Life Insurance premiums can also be lowered by stopping smoking cigarettes.  Fiona Jackson, head of protection insurance at AxA Insurance says “Giving up smoking can save people a significant amount of money as well as hopefully bringing a longer and better quality of life.”

If you quit smoking cigarettes you can take off as much as a 1 3rd off life, critical illness  insurance and income protection insurance premiums because the facts that we now have proves that smoking can cause serious illness and aggravates any other existing medical conditions.

If your circumstances change you may have to alter your policy.

Never think that once you have bought your insurance policy that you can just continue with your life and think no more of it. constantly be very aware of the insurance cover you have and be sure that, should your situation change, or, are going to alter your insurance must have capacity for these revisions.  Clear examples are changing jobs, or do you intend to have more children; often think about everything that may escalate your living costs and will need to to be covered if you are taken ill and cannot work.

Summary
The choice offered by protection insurance menus and the firms who are leaders in this type of insurance. This story explains how the client can profit 

Protection Insurance options which give customers the chance to pick ‘n mixlife and health insurance cover in an all in policy have been obtainable for over twenty years. Sadly the initial insurance policies did not prove to be very attractive to clients although the concept was right. A single set of paperwork, direct debit and administrative savings were accepted by both insurance companies and the consumer. On the other hand the benefits given by these menus were exceeded by the shortcomings.

The choice of products offered by the key pioneers, Friends Provident, weren’t competitive.  IFAs shopped around top insurers to form protective deals for the clients, which notably reduced the premiums found in protection menus. The market has now moved ahead and a large amount of new protection policies have been released which have achieved the approvalof of most of the intermediaries.

Scottish Provident was the 1st to develop a winning blueprint when it reintroduced it’s Self Assurance menu. They were soon followed by Friends Provident, Skandia Life, Liverpool Victoria Life, Scottish Equitable Protect, Legal and General and others are sure to shadow their lead quickly.

Three key details are to be found in the majority of protection menus. Critical illness insurance cover quotes a number of stated critical conditions for which it would pay out a lump sum. The least expensive option, term assurance, pays out a lump sum if you depart this life within a given period and nothing from then on. The final one is income insurance, which gives you a regular income if long term disability or illness stops you from working. The menu may give you redundancy cover, which is usually limited to one or two years and might also be restricted to the pay out of a mortgage. The major attraction is the flexibility of the policies. For example numerous levels of insurance cover can be arranged for separate sections, so so if you need to make a claim on one part the other parts will still stay in force. No supplementary health information will be required prior to major living events, like moving house, having a baby or becoming married. These further benefits are called ‘Guaranteed Insurability Options’.

Different elements of insurance may be included after the close of a short questionnaire and you will still get benefit from the typical policy discounts.

A case of the benefits resulting from a protection option is demonstrated by a young couple who went for Aviva’s Protection Choices menu for mortgage protection insurance. They are paying a jointly held policy of 31 pounds and 7 pence a month for separate critical illnesses and life cover , which have been done on a joint life basis. At the start they have insurance of £112,750 which reduces as their 24 year homeowner loan is paid off. Life cover would be paid out if one of them departs this life and the policy is terminated, but the one surviving will still benefit from critical illness insurance Life cover will be upheld for both of themeven if one of them became ill and the policy will settle on first to die.

If the husband and wife had bought a standard joint life insurance policy with Legal and General they would only receive a pay out on their 1st claim. However with their Protection Choices policy they are given 2 possible settlements costing only six pounds more. Even though employees are sometimes offered income protection with their job they may also wish to cover their home loan in a similar way. Plus they may want to take out additional critical illnessinsurance and life cover not tied to their mortgage. Aviva’s  protection options allows them to do this in a cost effective and straightforward way. The new options based insurance policies allow you to save money although you can research around for single policies and only save pence.