Despite the underlying simplicity of life, most web sites channel their online clients, based on telephone help and advice, staffed with experienced personnel. They represent your safety net, so if a little technical knowledge is needed, help is at hand.
But it is always a good idea to have a few Top Tips in your back pocket when you shop online for life insurance. They will h
elp you ask the right questions and find the best policy.
1. Always have your Life ", written in Trust".
This means that in the event of a claim that the money goes directly and immediately to the person (s) you nominate when you first take the policy out. It also avoids all possibility of your estate to pay inheritance tax of the proceeds of your policy, and that could represent a 40% tax saving!
Everything you need to do is tell the online brokerage organize your policy that you want your policy "written in Trust" and the names of the people who pay the life insurance in the event of a claim. They will then sort everything out for you. The extra good news is that this service is always free. So it's a win-win situation and there are not many of them around these days!
2. In the first years a chance for life insurance will be cheaper but a Guaranteed Policy will produce a better buy in the longer term.
With a "Guaranteed Policy" the insurance company guarantees never to increase your policy's premium.
With a "Chance of Policy," you agree that your insurance company can control the cost of your policy at regular intervals. But do not kid - in our experience a "review" is just another word for a price increase. After all, who ever heard of an insurance company that goes up a chance to charge you more! The review intervals are usually between 2 to 5 years, but this will differ between insurers. You will find information on the review intervals on the documents sent to you before you accept the insurance - these are called key features documents.
So, comparing otherwise like for like policy in the first year of premiums for a "Chance for Policy" will undoubtedly be lower than premiums for a "Guaranteed Policy". Thereafter, the premiums for an Opportunity Policy increase eventually catching up and overtaking, the premium for a "Guaranteed Policy".
In our experience, you can expect the monthly premiums for a policy Ability to exceed those of a guaranteed policy about 7 to 10 years and then within the next 10 years, more than double again. If your budget is currently tight then by all means choose an Option for policy - after all your salary may increase in future years and reduce stress. On the other hand, if the premiums for a Guaranteed Policy are affordable, we think they represent your best buy.
A footnote. Many insurers have stopped offering "Guaranteed" rates for standalone critical illness insurance policies. This is because they have experienced much higher claim rates than they originally expected. You can still find a Guaranteed life insurance that also provides critical illness cover. As we have explained, "Guaranteed" rates are especially good value and if you can get a quote for a Guaranteed life policy that includes critical illness cover, you can have a real bargain.
3. Thinking of a common life?
A Common Life insurance policy is usually written on a first death basis. This means that the policy will pay for the death of the first policyholder, subject to the policy in force at the time. This leaves the other person is uninsured and older. Older people can struggle to get life insurance at an affordable premium, so instead of a common political consider taking out a separate policy now. Overall, it will come through with a little more expensive - but you get twice the coverage, and double the peace of mind.
4. To sign a life insurance? Now would be an ideal time to include critical illness cover.
Are you likely to need critical illness insurance in the future? Yes? Then consider adding it now to arrange your life insurance policy. Why? There are three reasons.
Firstly, a life insurance combined with critical illness cover will work out considerably cheaper than buying two separate policies. Secondly, as we have already explained in the footnote to Tip 2, you may be able to buy a combined life and critical illness policy with a guaranteed prize. It could be a real bargain. Finally, premiums for critical illness cover increase rapidly as you get older - so the sooner you remove it, the cheaper it becomes.
5. Do not confuse Terminal illness cover with critical illness cover.
There is world of difference between terminal illness and critical illness cover so it is important to understand the difference.
Terminal illness cover pays the insured lump sum if a doctor diagnoses you with an illness from which Doctor expects you to die within 12 months. Most of the good life policies automatically include terminal illness cover at no extra cost. This is basically an early and welcome policy payout.
A critical illness policy pays the insured lump sum if you are diagnosed with one of a variety of chronic diseases, and there is no life expectancy criteria. Yes, with many of the insured illnesses you could expect to survive for many years. For example: certain cancers, heart disease, stroke, multiple sclerosis, loss of speech, vision or hearing, onset of Parkinsons or Alzheimers disease, third degree burns etc. Say you were an engineer aged 40 and you've lost vision. A critical illness policy would pay the same, and that money could well be crucial to help you and your family through many difficult financial years ahead. If you just had a fatal illness cover would be no chance of a payout.
So as you can see, critical illness cover is far more comprehensive than simple Terminal illness cover, and therefore critical illness cover always costs you extra.
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