Quick Enquiry
If your main concern is protecting your family or other dependants, term insurance is often the cheapest way to buy all the cover you need.
Term Insurance pays out if you die within a set period of time (“the term”). If you survive the term, it pays out nothing. You might set the term at, say, the number of years until your children are financially independent, or the number of years remaining on your mortgage. It is not an investment, however, it is a low cost form of life insurance.
Types of Term Insurance:
Lump Sum Term Insurance (including mortgage protection policies)
- These are term insurance (Details can be found at: http://www/fsa/gov.uk/consumer/05_INSURANCE /shop_around/mn_term_insurance.html)
- (also called protection-only life insurance) for a fixed term i.e. 10.15.20 years etc and only payable if the event (i.e. death) occurs within that time.
FAMILY INCOME BENEFIT
• Family Income Benefit (FIB) pays a monthly income to the beneficiaries in the event of death of the person/s who are insuredWHAT TO CHECK OUT - DOES IT MEET YOUR NEEDS?
- Can you get the amount of cover you need? There may be a maximum or minimum.
- What type of policy do you want? For example, family income benefit (a policy which pays out income rather than a lump sum) increasing policy (where cover and premium rise over the years), renewable policies (which let you extend the original term).
- Check for exclusions – in other words, when the policy won’t pay out. For example, most do not cover death due to alcohol or drug abuse. You might not be covered while taking part in risky sports. If you health is poor when the policy starts, some causes of death might be excluded or you might be refused cover altogether.
COST
- Typically, tables show the monthly premium for, say, £100,000 of cover for a man or woman of a given age for various terms (from say 10 to 30 years). Find the best premiums for the example which most closely matches you.
- Smokers usually pay more than non-smokers. The premium may be higher if your health is poor, or you take part in risky activities.
- The premium may be higher or cover refused altogether if your lifestyle puts you at added risk of contracting HIV/AIDS.
- Premiums shown are usually fixed for the whole term.
- You get tax relief on premiums if you take out life cover through a personal pension or a stakeholder pension. However the life insurance element will be taken as part of the maximum you can pay into your personal pension.
YOUR COMMITMENT
- How much must you pay?
- Do you pay monthly or yearly?
FLEXIBILITY
- Does cover stop immediately if you miss a payment or is there a period of grace?
- Can you reduce or increase cover easily as your circumstances change? Are there extra charges for doing so?
RETURN
- Not applicable.
RISK
By paying extra you can usually include “waiver of premium”. It pays the premiums if you cannot work because of a long term illness.
IMPORTANT NOTES
FEE DISCLOSURE
It should also be noted that it is usual for insurance companies, who underwrite the policies recommended to you, to pay a fee to the Adviser. This is in recognition of the expertise, time, marketing expenses and administration in initiating the policy for you.
COMPULSORY INSURANCE
Some Lenders’ mortgage offers may contain a condition that you take out insurances such as Buildings, Contents, Accident. Sickness and Redundancy. They may also insist that you take this out with them. Please refer to your Mortgage offer to check this and that if it is a condition, it is acceptable to you.
CONFIDENTIALITY
We will treat all your personal information as private and confidential (even when you are no longer a customer) except where disclosure is made at your request or with your consent in relation to arranging your Mortgage.
You have a right of access under the Date Protection Act 1998 to your personal records held on our computers and files.
COMPLAINTS
We have internal procedures for handling complaints fairly and speedily and we will tell you what these are. These will include establishing a set time for an initial acknowledgment to your complaint. We will tell you how long it might take us to respond more fully.
If you wish to make a complaint, we will tell you how to do so and what to do it you are not happy about the outcome. We will help you with any queries.
FSA USEFUL GUIDELINES
The Financial Services Authority publishes useful guides on choosing a mortgage. These are available free through its web site: www.fsa.gov.uk/consumer, or by calling 0845 606 1234. The website also provides Comparative Tables to help you shop around.
