Life Insurance can be an absolute minefield when it comes to how much to pay, how much to be insured for and which insurer to use!
Below we have broken down what we believe to be the eight most important steps to consider when you apply for Life Insurance:
When you apply for Life Insurance be prepared to go with an insurance provider that is different to the one you use for your home and car insurance. You will find a lot of well known, big brand names on the marker offering Life Insurance and it is worthwhile looking at them all to see who offers the best policy for your needs.
Life Insurance is usually paid for with a regular monthly payment to the insurance provider. You can go for the cheapest policy available and have the perfect Life Insurance policy for your needs. However different insurers class different occupations, health conditions and hobbies as having different levels of risks. So someone may appear to be the cheapest on the market at first glance, but they become one of the most expensive after underwriting your policy.
It would all be wonderful if we could be insured for £10million so that we know our loved ones will be well taken care of if we were to die. However for the majority of us that is simply not possible. Insurance providers are willing to insure many individuals provided that there is an insurable interest. Once you start hitting into the large sums for Life Insurance the insurer is going to want to see financial reports to justify the level of cover you are asking for. Ball park figures? You want to be looking at insuring an amount similar to any liabilities that you have (mortgages, loans, etc) and then possibly any additional funds that your family will need to maintain their standard of living.
It is quite standard for an insurer to ask to see a report from your GP before they confirm the terms of Life Insurance that they are willing to offer. This can actually be a very positive thing. Whilst it can take a little longer to set your Life Insurance up, it will mean that the insurer has full details of your medical history at the time of application*. This will help avoid any risk of non-disclosure in your Life Insurance application.
If you have previously applied for Life Insurance and not been able to secure cover, do not give up on finding a policy. Insurance providers regularly change their underwriting guides and someone who has previously been unable to have cover may well be able to do so in the future. It is also possible to approach specialist insurers for Life Insurance who are able to consider a much broader range of cover than the standard market you will find on a google search.
It is imperative that you check your policy documents, policy conditions booklet and key features document once your policy has started. This will ensure that you know exactly what you are and are not covered for. It is also important to check your personal details such as date of birth and medical history declaration.
It is worthwhile to review your cover every few years or so to make sure that it is still relevant to your needs. You may require less insurance because you have paid off a chunk from your mortgage, no longer have dependants or won the lottery. On the other hand you may need more insurance because you have had children, moved home and have a bigger mortgage or want to leave some money behind to cover any funeral costs you may have.
Be it ourselves or another insurance broker, use one! This is what we do, day in and day out. We know the insurers, we know the products and we know what policies are best for your needs.
This is a very brief guide as to what you should be doing when you are looking at applying for Life Insurance. As always be sensible and make sure that you know what you are paying for. If in doubt ask someone who know what they are on about. Please feel free to use our online quotation form here or speak with one of our insurance advisors on 0800 567 7450.
* Provided that your health does not change from the point of application to the policy start date. You must inform the insurer if your health changes during this time period.
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Please feel free to request a quote from us using our online form. As a broker we search a fair analysis of the whole market and will always take your specific risks and concerns into account. For this reason we do not currently offer prices online but will always do our best to reply to you by email, text or phone as soon as possible.
The more information that you can provide us about your health conditions, hobbies, travel and/or occupation the better as this will help us to provide the most accurate indications of price.