What is Life insurance?
Many of us will at some stage in our lives have the need for life insurance. Life insurance is an agreement between you and an insurer and under the terms of a life insurance contract, the insurer promises to pay a certain sum to a designated beneficiary when you die, in exchange for your premium payments.
Why would you need life insurance?
The most common reason for buying life insurance is to replace the income lost when you die. For example, say that you work, and that your income is used to support yourself and your family. When you die and your income stops, the life insurance proceeds can be used to continue to support the family members you've left behind.
Another common use of life insurance proceeds is to pay off any debts you leave behind. For example, mortgages, car loans, medical bills, and credit card debts are often left unpaid when someone dies. These obligations must be paid from the assets left behind, but can deplete the resources that your family needs. Life insurance can be used to pay off these debts, leaving your other assets intact for your family to use.
Life insurance creates an estate for your heirs and can protect their standard of living. After your debts and expenses are paid, there may not be much left over for your family, but life insurance can automatically provide assets for them after your death.
What do you need to know about life insurance?
You need to know that there are several kinds of policies that may be available to you, if you are healthy enough.
- Level Term Insurance - A life insurance plan that pays out a lump sum in the event of your death during a specified term, some plans also pay out should you be diagnosed with a terminal illness.
- Mortgage Protection - A form of life insurance designed to cover a capital & interest mortgage, in the event of your premature death, where the lump sum payable decreases in line with your reducing mortgage debt.
- Critical Illness Cover – You are currently six times more likely to have a critical illness before the age of 65. A critical illness plan provides protection in the event that you suffer a critical illness such as cancer, a heart attack, a stroke, or multiple sclerosis...not a pleasant thought, but at least you'll have the comfort of knowing you can still provide for yourself and your family and any possible medical costs.
Will Smoking Affect my Policy?
Smoking is detrimental to health and is a leading cause of life-threatening illnesses. As a result, smokers pay higher premiums than non-smokers, as the risk of them dying early is greater. Each insurer uses its own methods of weighting the additional premium payable.
An insurer who covers a period of your life will want to protect their investment in you. While the term of your insured period runs, you agree to abide by the terms and conditions of the insurer. If you do not abide by the terms and conditions, you will invalidate your protection.
You will need to have registered with a UK doctor and be planning to make the UK your home. The insurer may request that you have a medical that can be completed by a nurse at your home at a time to suit you.
Alternatively with insurance over £1m a medical can usually be arranged in Harley Street if this is preferred?
The cost for the medical is included within the policy however if you have had a pre-existing illness, past medical records may need to be requested from your country of previous residence.
Most importantly, if you smoke and do not declare the fact, you run the risk of invalidating your policy if you have to make a claim.
This can have a huge financial impact on those who depend upon you and are unable to make use of the money that would have been allocated to them in the event of a successful claim.
Why use an independent adviser when buying Life Assurance?
A bank or an online provider can only usually sell Life insurance products from their own range, this service can mean that you may have the wrong product for your particular needs and could result in you over- paying possibly by thousands of pounds over the term of the insurance.
Independent financial advice is considered the gold standard of financial advice, since it offers access to and guidance on a huge pool of products. This option allows you to have a qualified professional review of your financial situation, determine your needs and search all the options for the best value policy.
This service can now be brought to you through Law Firm Ltd by means of the cooperation with insurance brokers.
Law Firm Ltd has an agreement and negotiated reduction from brokers to ensure lower than direct internet pricing but with the benefit of having full financial advise. This gives you the piece of mind of knowing you have the correct cover for your personal situation with the best value.