Life insurance can be complicated. Which type of policy should you buy? What is the purpose of it - is it an investment to pay off your mortgage with? Protection for your family if you die early? A payment that ends after a certain age or one that lasts until your death? Do you pay monthly or one lump sum? Should monthly payments increase so benefits are not destroyed by inflation?
These, and more, are all questions you need impartial and qualified advice on if you are not to risk making a very expensive mistake.
In 2020 Aviva claims they paid out on life insurance claims in 99.3% of cases. They have two main types of term insurance (this is cover for a fixed period only, not whole of life); what is call Level, and Decreasing. Level cover pays out an agreed sum if you die within the agreed term; and you can choose to increase the monthly payments to keep up with inflation. Decreasing cover is a policy in which the payments remain fixed but the benefit falls over time; this is cheaper and you may choose this to make final payments on a mortgage which you are gradually paying off. In both cases there is no payout if you die after the agreed term of the policy, there is no surrender value if you try to cash it in, and if you stop payments the cover ends. Death by self inflicted injury or suicide will only qualify for a payment after the policy has run for at least 12 months.
Legal andGeneral claim to be the UK's top provider of life insurance, based on a report in 1929 by Swiss Re, reputedly the world's biggest re-insurer. They have been providing life insurance for more than 180 years. Again they offer level or decreasing cover, but also an over 50s plan for people who are between 50 and 80 which provides a mixed cash sum after the policyholder dies. There are no medical questions asked, and cover for accidental death can begin immediately although death from other causes only attract a payout after a year. Payments stop at age 90 although cover continues until life's end. This type of policy is often taken out by people who want to cover funeral costs, but since the payout is fixed the effects of inflation should be considered carefully.
Sun life was founded in 1810 and it is now owned by Phoenix Group Holding plc, which used to be well known, by earlier generations, as the Pearl group. Over 50s cover, without a medical examination, is a speciality of theirs and they were in fact the first company in the UK to offer policies without medicals back in 1900. They can also provide equity release to suitable applicants, as well as a funeral plan which guarantees to pay the full costs of a cremation and, optionally, a funeral service but these must be arranged through specialist funeral group Dignity Funerals Ltd. Premiums rise every year for up to 20 years and they will not pay for the cost of a funeral plot, which can be substantial. There are three levels of funeral plan, going from an extremely simple one to provision of a decent coffin, hearse and two funeral cars. There is also help via a local funeral director to attend to collection of the deceased person and the necessary paperwork.
In 2004 Vitality grew out of a partnershio between a South African financial services group called Discovery Limited and the the long established Prudential, but by 2014 Discovery bought out the Pru's shares and are now the sole owners. They have invested heavily in advertising and they offer term and whole life insurance, mortgage protection cover, a serious illness plan and income protection cover. They offer discounts and benefits to those they consider to be taking steps towards a healthier lifestyle by, for instance, joining particular gyms, meditation services or a certain stop-smoking programme, and their Rewards Programme provides discounts from some leisure or sports providers. They claim these initiatives can help their clients to live longer.
You have a choice with Zurich of either life cover, or life with critical illness cover. This must be decided right at the outset. You can also optionally add children's benefit; this can cover the kids with certain benefits until they are 22 years old. You can choose level or decreasing cover, as some of the above companies do, but also increasing cover in which you can opt to increase your cover by 3%, 5% or a figure equivalent to the Retail Prices Index. However an increase in premium of 3% would only increase the guaranteed benefits by 2% because of the increased risk of death as we get older so you may wish to compare this to other insurers who offer inflation-linked policies. In 2020 Zurich say they paid out on 98% of death claims but only 87% of critical illness ones.
Reassured is a growing intermediary, in both turnover and staff numbers, specialising in selling protection insurance, and they claim to be amongst those creating the highest sales of life insurance in the country. They have been in business since 2009 and in the year ending January 2020 they are said to have sold more than 180,000 policies, an increase over the previous year of 49%. Their service is telephone based with business generated through direct sales, corporate partners and sales agents and they compare quotes from major insurers such as Legal & General, Zurich, LV= and AIG. As well as life insurance, Reassured say they can can also compare over 50 plans, providing income protection and funeral plans quotes. As of mid 2021 they had over 50,000 reviews on Trustpilot with an overall .excellent' rating.
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