Life Insurance - Frequently Asked Questions
How does Life Insurance work?
Basically you decide what level of cover you want, the term you want to protect your life for and what you want to protect i.e. a mortgage or provide security for your loved ones.
What advise do you give?
We are a non-advised business which means that we won’t give you advice. What we will do is ask you relevant questions to confirm what you want and then provide you with a quotation and give you relevant information to make an informed decision.
What is Life insurance?
Life insurance is a way for you to protect your family if you’re not around to do so. You can provide cover from as little as £5 depending on curtain criteria such as age, term and sum insured.
The policy term is the length of time the policy will cover you for. Once the term has been reached a new policy will need to be taken out.
What is, Guaranteed Sum Assured (GSA)
The GSA is the amount of cover you are insured for. An example would be cover of £100,000 on a level term is what would be paid to your estate in the event of a claim.
What is Level Term cover?
Level term cover will provide a fixed GSA that will pay out the same amount at day one, as well as at any time within the policy term.
What is Decreasing Term cover?
Decreasing term cover will have a decreasing GSA over the term of the policy. Decreasing policies are usually associated with a repayment mortgage whereby the insurance decreases in line with the mortgage balance.
What is the difference between a Joint or Single policy?
A joint policy will allow two people to be part of one policy and will pay out on the 1st person who passes away the policy is then closed and the remaining insured will need to arrange a new policy.
A single policy will cover the insured only and pay out on a subsequent claim. Some consideration should be given as to the benefit of applying for 2 single policies where a married couple for example want to protect their family rather than taking out a joint policy which only protects the 1st person who passes away. Usually for a small additional charge they can protect both lives irrespective of who passes away 1st the insurer will pay out on both lives.
What level of cover should I take?
As we are a non-advised business you will need to assess your cover requirements and let us know we can then provide you with a quotation and some relevant facts for you to make an informed decision.
What is a Rated Premium?
Insurers will review your application; specifically they will look at your health and lifestyle and assess them against their risk matrix. Based on your health and lifestyle they may still offer cover but at a higher premium. Examples are a previous history of cancer or a higher than average BMI.
What is Whole of life?
Whole of life is a policy that will provide a sum assured until the insured passes away. This type of policy as you would expect can be more expensive as there is no end date and it is guaranteed to pay out on any subsequent claim.
Am I classed as a smoker?
Smoking is very bad for your health; the fact is that smoking can cause life changing health issues. Therefore it won’t surprise you to know that it will affect the life insurance premiums. The insures classify a smoker as someone that during the last 12 months has smoked any cigarettes, cigars, a pipe or used nicotine replacements including e-cigs?
Claims are made direct to the insurer and are normally paid within a very short time subject to the relevant evidence being provided.
Policy holders should make their family aware of any Life insurance policies should a claim need to be made.
What is terminal illness cover?
Terminal illness is a free cover that most insurers offer as part of the life insurance. What it does is provide a lump sum early if you are diagnosed with a terminal illness. Terminal illness cover will not however pay out in the last 12mths of your policy term.
If I already have life cover can I still take out more cover?
Yes you can have as many policies as you want, however some insures will have limits that trigger a request for further information before they will agree to underwrite the policy. If you request a GSA in excess of £500,000, be prepared for additional questions.
Can I cancel my policy?
Yes you can cancel your policy at any time; if you cancel your policy within the 1st 30 days then you will receive a full refund of any premiums paid. If you cancel outside the 30 day period then no refund is applicable. If you decide you want to cancel the policy you can either contact the insurer direct or just cancel the direct debit. The insurer will write to you to confirm the direct debit has been cancelled and provide you with options if this was done in error.
Will I get my money back at the end of the term?
No, unfortunately not as this is not a savings plan it will only pay out the GSA on the death or diagnosis of a terminal illness providing it is not within the last 12 months of the term.
What happens if my circumstances change?
We never know what is round the corner as such it may be that the policy is not suitable. Things like a new mortgage, a new baby or job change mean that you need to re-look at your cover. Some insurers will allow curtain changes to the policy without having to complete a new application. Should you find you self in this situation please call the Inspired Life team how will be able to provide some facts and where necessary provide you with a new policy.