The Harris Life Insurance Blog

Summary
It is always advisable to understand just what you are looking for in the way of cover as only you are aware of your own situation.  We clarify what you need to know and how to maintain it when you have it.

Sean Masters, head of investments at Cambridge based financial adviser Skerritt Consultants, counsels that it is very shortsighted of people not to have Life Cover and/or Critical Illness Cover as he maintains that life has 2 potential dangers – either living too long and dying too early.  “Its absolutely essential to have some insurance cover in place – especially if you have got young children,” he says. “In these unsettled times you must construct your own little fortress because no one else is going to do it for you.”

Greg Suttcliffe at Bestdeal says now is the right time to buy such policies as there are some very reasonable premiums about owing to the fierce competition for business within the market. “The price of life insurance has come down – fallen about forty five per cent in five years. It has never been as cheap,” he adds. “The critical illness industry paid out on 83 per cent of claims in 2006 – rising from 78 per cent  the during the last year.”

Make sure you check what insurances you already have before you take out any more.  Do you have any investment policies or does your employment pension plan give you any other insurance?

The simplest way to calculate how much cover you require is to add up how much you would require to maintain the same standard of living over a year and then multiply it by 25 years.  The minimum amount needed should settle all debts and and leave a lump sum for your family.

Obtaining the best deal

When deciding on your policy it is essential that you read the manual that many insurers have of the illnesses and conditions that they cover. It will record everything and should be strsightforward and simple to comprehend.  You will also want to look at the documentation of the key features of the insurance which will contain all benefits and exclusions.

When a person takes on the responsibility of a home loan they are usually counselled to take out critical illness insurance cover but should look around and not just take the first policy offered.

If you begin paying these premiums when you’re younger they are considerably cheaper, distinctly different to leaving it until you are older, when the policy rises quite apppreciably.

Insurance premiums can also be reduced by quitting smoking cigarettes.  Mary Lakes, manager of protection insurance at  AxA Insurance says “Giving up smoking can save people a significant amount of money as well as hopefully bringing a longer and better quality of life.”

If you quit smoking you can knock as much as a 1/4 off  life insurance, critical illness  insurance and income protection insurance payments because the facts that we now have indicates that smoking can bring about critical illness and aggravates any other existing medical conditions.

If your circumstances change you may have to alter your policy.

Never believe that once you have purchased your insurance that you can just keep on with your life and dismiss it. At all times be very mindful of the cover you have and ensure that, if for any reason your circumstances change, or, is about to alter your life assurance cover must have capacity for these amendments.  Perceivable examples are moving jobs, or perhaps you intend to increase your family; regularly consider anything that may escalate your living costs and must be to be covered if you are taken ill and cannot work.

Summary
The alternatives provided by protection major insurers to form protective packages for the consumer, which considerably reduced the rates found in life insurance options. The industry has now progresses and a flood of new protection policies have been introduced which have acquired the approval of many intermediaries.

Aviva was the first to develop a winning blueprint when it reintroduced it’s Self Assurance options. They were soon followed by Scandia Life, Scottish Equitable Protect, Friends Provident, Legal and General, Liverpool Victoria Life and others are likely to shadow their lead before long.

Three key details are found in nearly all protection menus. Critical illness cover names a number of stated critical illnesses for which it will pay out a lump sum. The cheapest option, term assurance, settles a lump sum if you die within a given period of time and nothing thereafter. The last one is income insurance, which provides you with a regular income if illness or long term disability thwarts you from working. The menu may give you redundancy cover, which is generally restricted to eighteen months or two years and can also be limited to the payment of a mortgage. The principle appeal is the flexibility of the insurance products. Such as numerous levels of cover can be organised for individual sections, so if you make a claim on 1 part the other parts will still remain in force. No more medical evidence will be needed prior to major life style events, like moving house, having a baby or becoming married. These added benefits are known as ‘Guaranteed Insurability Options’.

Different elements of insurance may be supplemented following the completion of a short questionnaire and you are still able benefit from the standard policy discounts.

An example of the benefits resulting from a protection option is demonstrated by a newley married couple who selected Legal and General’s Protection Choices menu for mortgage protection. They are paying a jointly held policy of £31.09 a month for separate critical illnesses and life policies, which have been done on a combined life basis. At the start they have insurance cover of £109,990 which reduces as their 25 year homeowner loan is paid off. Life assurance cover would be paid out if one of them departs this life and the insurance policy is ended, but the survivor will still be covered for critical illness insurance and Life insurance cover will be upheld for both of them even if one of them became ill and the insurance will settle on first to die.

If the couple had purchased a standard joint life insurance quotes with Co-op Insurance they will only get a pay out on their 1st claim. Whereas with their Protection Choices insurance policy they are given two possible settlements costing only 8 pounds more. Even if employees are sometimes offered income protection at work they may also wish to cover their home loan in a similar way. In addition they might want to take out extra critical illnesscover and life assurance not linked to their mortgage. Friends Provident’s  protection menu enables them to do so in a straightforward and cost effective way. The new options based insurance products permit you to save pounds even though you can shop around for single insurance products and only save a couple of pence.