Summary
Permanent Health Insurance, Life Assurance and Critical Illness Insurance should all be considered by people who have a husband/wife or children or anyone dependant on them for financial security. Read this article to find out what is relevant and available.
It is deplorable but true that one in five of us will suffer some form of cancer before before the age of sixty five. Pat May, a director at Sarah Shaw and Partners, a firm of Independent Financial Advisors, says “That’s why protection is imperative” – those are not good odds,”Life Insurance is the most general insurance taken out, though it is doutful as to whether it is the most essential. Life cover is imperative if you have a spouse or children but not if you don’t as it settles after you die. Many people assume that they can’t afford to have Life Insurance but the truth of the matter is that they cannot afford not to have if they have a wife and children to protect and support.
The Life Insurance Shop a firm of Independent Financial Advisors reveals in a current study that twenty four per cent of people with a family don’t know if they have Life Insurance Cover or not and twenty per cent don’t have it.
Many business packages include life cover but they are normally not enough to provide an income for a spouse with dependants and cover the mortgage too. A standard guideline is to protect yourself for 15 times your yearly wage.
Money Supermarkets investigations have revealed that over the last thirteen years the average price of Life Assurance has fallen by 44% merely because people just happen to be living longer due in part to medical advances allowing sick people to recover from illness that, at one time, they would in all probability have died from. People who already have life assurance are probably not conscious of this fact and will not gain anything unless a claim is made, so do not need to feel that they have to stay with their existing policyholder – at this moment in time there are much better deals around.
On the other hand, Permanent Health Insurance and Critical Illness Insurance payments are rising as people are surviving severe illness and are making a claim on the insurance. They are still vital and ought to bebudgetedfor ifpossible specially if there are no dependants. The question that you have to ask yourself is can I afford not to have an income? For most of us the reply is no and everyone should have income protection.
Income Protection Insurance settlesa tax-free income which is worked out on a percentage of your salary for ‘non-critical’ as well as critical illness and for the complete length of time that you are unable to work.
Critical Illness Insurance, if you become potentially terminally ill, will pay out a tax-free lump sum,, which should help to lighten financial strain or provide for any adaptations that may be needed if your mobility will be affected. Statutory sick pay (SSP)will not pay out nearly enough money to help with the financial blow that critical illness can produce.
The Insurance Company works out a payment on your risk profile. If you have a family history of sserious illness or drink heavily or you smoke your premium will be higher. Premiums are calculated on the individual but if some of your family have been seriously ill, particularly under the age of 50, this could raise your premium by 49%.
Summary
A thorough and succinct guide to life cover. The article explains all the key words the life industry usesand what type of cover various policies provide.
Life insurance can help your family to be financially secure after you die. When you life insurance you stipulate the value you want the policy to pay out when you pass away – this money is called “the sum assured”. The amount you pay each month is based on this assured sum, and on your age and gender. That’s why you need to find the cheapest life cover quotes and quotes for better life insurance.
Your monthly payments will also be based on the type of cover you choose. There are two fundamental types of life insurance: level term insurance and decreasing term insurance plus many variation s within these categories.
Term life assurance is often purchased at the same time as a mortgage and should cover the same period as the mortage. If you haven’t died at the end of the period, you will not get any money returned. It is a simple insurance with no aspect of investment. It can protect your family by paying out a lump sum should you die within the period of time covered by your insurance.
There are two basic types of term assurance. Level term life insurance gives a fixed level of payout during the entire life of the cover which means that you beneficiaries would receive the same amount whether you died on the first or last day of the policy. It is usually bought with an interest-only mortgage, where the full capital has to be repaid on the final day of the mortgage.
Decreasing term assurance is where the cash to be paid out reduces by a fixed figure each year, finishing at zero at the end of the term. Since the level of insurance cover reduces during the term, premiums on this kind of insurance are cheaper than for level termpolicies. This cover is usually only taken out with repayment mortgages, where the outstanding capital reduces during the term of the mortage.
There is also a type known as increasing term insurance. Sometimes it is known as index linked insurance. This means that the payout sum increases by just a small sum annually in line with inflation. Increasing term insurance is a good way of protecting the buying power of the sum you have insured for.
With convertible term insurance, the policyholder has the choice of switching to another type of life cover – for instance a “whole of life”. If a person does take up this option, they do not have to submit any more medical investigations.
If you want your family to receive a monthly tax free income in the event of your death, you need a type of insurance called family income benefit. This gives the policyholder’s dependents monthly payments from the date the policyholder dies to the end of the policy’s term.
Life cover can be aquired on-line or from the high street through brokers, insurance companies, banks or from some friendly societies. Most sell directly to the public. Other outlets selling insurance include comparison websites and mortgage brokers.
Factors affecting monthly premiums include the whether or not you smoke, your age, sex and the insured sum. Some companies insist on a medical before offering cover, but this is not as common as in time gone by.
Life insurance prices alter over time and if you already have a plan it can be well worth shopping around to find out if you can get a much cheaper deal. You can usually stop your existing insurance plan without penalty – but always make sureyou have another one in place before you do so.
Summary
A comprehensive and succinct guide to life cover. The article explains all the important technical wordsand what type of cover different policies provide.
Life insurance helps your family to be financially secure in the event of your death.
When you buy set the figure you want the insurer to pay out when you die – this money is called ”the insured sum”. The premium you pay is based on this amount, and on your whether you are male or female and your age.
Your monthly premiums will also be based on the type of online life assurance policy you need. There are two fundamental types of life insurance: level term insurance and decreasing term insurance plus many variation s within these types.
Term insurance is frequently bought at the same time as a mortgage and should cover the same time period as the mortage. If you haven’t died at the end of the insured term, you won’t get anything back. It’s a simple insurance with no aspect of investment. It can protect your family by paying a lump sum should you die within a specific time period.
There are two basic types of cheap life cover. Level term gives a constanly maintained level of payout during the entire life of the insurance cover which means that you beneficiaries would receive the same amount whether you died on the last or first day of the policy. Level Term cover is usually bought with an interest-only mortgage, where the full capital has to be repaid in full on the final day of the mortgage’s term.
Decreasing life insurance is where the policy payout reduces by a preset figure each year, finishing at nothing at the end of the term. Since the amount of payout falls during the term, premiums on decreasing insurance are cheaper than on levelpolicies. This cover is usually only taken out with repayment mortgages, where the outstanding capital reduces during the mortgage term.
There is also a type known as increasing term insurance. Some insurance companies call it index linked insurance. This means that the sum to be paid outincreases by just a small sum each year in line with inflation. Index linked insurance is a good way of protecting the buying power of the sum you have insured for.
With convertible term policies, the policyholder has the possibility of changing to another type of life insurance – for instance a “whole of life”. If a person does take up this their convertable option, they do not have to submit any further medical investigations.
If you chose a type of insurance called family income benefit your family would receive a tax free monthly income if you were to die and this income would continue until the policy reached its termination date. This gives the policyholder’s dependents monthly cash payments from the date the policyholder passed away to the end of the policy’s term.
Life insurance can be aquired on-line or from the high street through insurance companies, brokers or from some friendly societies. Many sell directly to the public. Other outlets selling insurance include websites and mortgage brokers.
Factors affecting premiums include the sex, age, sum assured and whether or not you are a smoker. Some companiesinsist on a medical before offering cover, but this is less common as in the past.
Prices for life insurance can alter over time and if you already have an existing policy it might be worth shopping around to find out if you can get a cheaper deal. You can always finish your existing plan without penalty – but always make sureyou have another policy in place before you cancel your existing cover.
Summary
The necessity for clarity and truthfulness when writing critical illness insurance policies. This article explains.
Very little is more upsetting in life than to be diagnosed with a chronic or critical illness. Matters are made a thousand times worse when your insurance company informs you that they won’t pay up on your critical illness policy or private medical insurance for the Cancer or HIV you are afflicited with.
You are asked to read sub-clause five of paragraph 326 of the small print, which informs you that you have been diagnosed with the wrong form of cancer. Only tumours below the knee are covered and only the first five days of your treatment will be paid for, then it is up to you to find the money.
This situation may sound strange, but in spite of brokers and insurers being regulated, this type of practice continues to carry on. It has been a time-consuming process to tidy up the industry and to ensure consumers get a fair deal and get the cheapest mortgage life cover.
A short time ago Cancer Backup, a well known charity, underlines this predicament by organising a huge array of mystery shopping surveys, which hightlighted some disconcerting facts about the private health insurance industry. It established that of most of the leading insurers only BUPA offered cover for cancer patients throughout the duration of their illness. Only immediate treatment is covered by the majority of health insurance policies. Treatment or care over a long period, such as hormone replacement or chemotherapy is not normally included.
While insurance companies and brokers want to finance long term cover for policyholders with chronic illnesses, they won’t always make it clear to potential clients, at the time of taking out the policy what they are covered for. And they will want quotes for cheap life insurance.
While both Cancer Backup and Macmillan Cancer support have been in consultation with comparable establishments within the industry to lift the standard of sales practices and make the phrasing of policy documents much clearer, since the report was published two years ago, progress has been slow.
Private medical insurance, life insurance and critical illness cover is normally taken out by people who are quite fit and healthy. The last thing that crosses their minds is getting cancer. That is why it is so essential to point out a policy’s exclusions before they sign up.
A testimony of best practice for companies writing and selling medical insurance policies has been updated recently by the ABI, which is a much needed step in the proper direction.
The trade body has now proposed that insurers and providers selling these kinds of insurance should prepare typical case studies, which explicates the circumstances when an insurance policy will or will not be paid. Alas insurance companies have no obligation to adhere to this code, which is voluntary.
Even though the Association of British Insurers initiative is to be embraced, the best way of amplifying a policy is by getting the salesperson to explain the small print.
Then again, industry terminology is in spite of everything still being employed by insurers to confuse the consumer. For example it is wrong to classify cancer as an acute or chronic illness, deliberates Cancer Backup. Nevertheless insurance companies are insistent that it should go in the acute category. clients only hear about this when their claim is rejected.
Even though the Association of British Insurers have got their attitude right, the insurers can only be made to better their principles by the regulator. Further training of tele sales staff, who sell the majority of the policies, is also long overdue.
More precise marketing procedures are required with terminology being eliminated. Ultimately it falls upon the insurersinsurance companies to make sure that their customers fully comprehend the terms of their insurance cover before they sign the document.
Summary
In this article we explain how Protection Insurance may possibly turn out to be more popular
with the insurance market finally making positive steps that could hopefully be successful.
A lot of trained advisors would be of the same opinion that Financial Protection Insurance is vital to the majority of families, whether it may be a precaution in the event of premature death, prolonged illness, loss of employment (especially in the present economic climate), or cover for an accident.
Life Insurance is the basis of all financial assurance for cover for a mortgage or to ensure a lump sum that is not taxable, in the eventuality of death. Unfortunately, a percentage of other Protection Insurance types, do not do not have equivalent sound qualities and have been labelled as being miss-sold. Also, based on what we are now aware, critical illness insurance has suffered as a result of incredible exclusions from insurance policies making it possible for insurers to reject claims even when they are genuine.
However, a little faith was restored when Aviva reported on the conclusion of claims on Critical Illness Cover on their 1/2 yearly statistics.
Critical Illness Insurance claims were being turned down because customers did not make known their full medical background. As a result Norwich Union reports that in the last 7 months the number of declined claims has plunged substantially from 6.8% in the previous year, to 1.5 per cent.
Why? We think, not only Legal and General but all of the insurers, because of harmful public relations, have been put into a position whereby they must diminish the amount of claims that are rejected. Does this prove how influential the press can be? Debateable perhaps – you may think we are dubious but we believe there are other factors that encouraged the insurers to make changes. Lately, as a result of bad press, sales of Critical Illness policies have fallen which in turn has clearly influenced the insurers profit. This is more likely to have been the catalyst to promote change!
Norwich Union, Scottish Provident, Axa and Friends Provident have instigated some prominent changes expressly created to diminish their rejection rates. Firstly, they outline plainly that all health disclosure, however minor a visit to a Doctor may have been, must be includedmade known. Axa, together with others will get a medically trained person to telephone every applicant to discuss all the details of their medical history. If the life cover policy then goes on risk, a number of policyholders are being informed that it is important that they give complete medical disclosure and they are allowed to add or put right any information on their application.
The life Insurance Company may then re-assess the risk and if it is thought to be increased the monthly payments will probably be increased – which seems more rational and ultimately more appropriate than paying the original payment then having a claim rejected as a result of non-disclosure of health facts.
This action should have been applied by the Insurance Companies a long time ago as the public’s understanding of Protection Insurance has eroded by their somewhat ‘Off the ball’ approach. On a positive note, there is a great need for protection insurance so we can hope that it manages to re-build trust and then the popularity it justly deserves.
You must always make sure that you compare life insurance policies before making your decision. Life Insurance policies all differ both in price and the specifics of each policy.
If you have a family history of ill-health or if you drink above the average limitor are a heavy smoker you might be under the misapprehension that life insurance cover or critical illness cover may be extreamely pricey. A manager at Norwich Union, Mr X, says this isn’t alwaysthe case, “Manyof thosesmoking, eating ‘too much or drinking will possiblyshy from cover for fear of being overly penalised for their badhabits. Hence, they will more than likely find that these essentialforms of financial protection cost even less than they thought.”
Mr Y a specialist re-insurer, says only 25 per cent of the working community have life insurance cover and only eleven per cent havecritical illness cover, even though it is generally understood that if you are employed and/or have dependants and a mortgage, this assurance is crucial. Many, many people are taking unnecessary risks.
If a person were to die unexpectedly their life insurance policy will pay out on their death and with a bit of luck will be enough to pay a mortgage off, and/or provide any dependants with financial security. In the case of critical illness insuranceit administers a dividend and helps at this time. Even though medicine is improving all the time and people are getting better from life-threatening illness, they are usually unable to work periodically or are forced to retire; this is when a tax-free cash lump sum can create the financial security needed.
If a person does drink or smoke insurance payments will be higher but they do vary considerably between one insurer and another. And they also vary between critical illness insurance and life cover. Legal and General doesn’t raise premiums until a person is consuming the equivalent of 4 pints daily. For a non-smoking 34year old, drinking less than 9 units per day, for 120,000 pounds of life insurance cover, the standard rate is 18.10 pounds per month. If you consume between 40 and 75 units weekly it increases to 28 pounds per month.
In relation, it will cost a 25 year old non-smoker 19.10 pounds per month for 100,000 pounds of critical illness cover . For a smoker this increases to 32.60 pounds monthly, but the premium only increases again if you smoke more than two packets a day.
**A family history of conditions such heart disease or diabetes does not mean that the insurance payments will be certainly higher. A 34 year old physiotherapist, Mr L, comes from a family that has many members suffering from heart disease although his brother and his parents do not. Last week, he and his wife took out life insurance and critical illness cover with Axa from Legal and General, providing them with a cover of 135,000 pounds. Their monthly payment costs 38.50 pounds and Mr L was quite surprised that his families medical history didn’t influence what they pay.
A managing director of Axa, Mr X, says if you can’t afford to do both, it is sensible to cover your mortgage with life insurance and then take out as much CIC as is affordable.
”Everyone who can afford it should have critical illness cover,” he says. “If you’ve got family dependant on you you should have life insurance and critical illness cover. The only people who may not require critical illness are those with excellent, not just standard, employee benefits.”