BUYING LIFE & PROTECTION           INSURANCE  
               ~ TOP 10 BROKER TIPS ~    

Cheapest Cost or Right Cover

Get Professional Advice ! Most people tend to buy things based on price via the net & not ensuring they have the right or enough protection cover. Think 1'st about covering all debts such as mortgages, loans, credit cards, overdraft etc; After this, then consider a lump sum at say 10x income to help protect the lifestyle you wish dependants to have if you made a claim. Alternatively, consider Monthly Income benefit insurance plan to avoid wondering where best to invest a lump sum.  

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Terminal or Critical Illness

Terminal illness benefit on lifecover is usually free & often pays out if you are diagnosed with less than 12 months to live. This is not to be confused at all with Critical Illness insurance - payable on diagnosis & hopefully survival of different types of specified critical illness such as cancer, heart attack, ms, stroke. Both benefits are currently paid out tax free. Waiver of premium benefit importantly covers premiums on long term sickness/ accident to ensure your insurance cover isn't lost if you lose your income.

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Single Life or Joint Plans

Consider 2 single life plans - instead of a joint life policy. Buying 2 single life policies potentially provides double the lifecover for couples & doesn't leave any surviving partner without any cover later in life. If you sometimes buy via the same insurer, they may offer a discount - so this may only cost a few £££ more.

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Plan into
Trust or Wills

With or without a valid will, it should be considered to put a plan into trust to ensure prompt payout. Also, if you both died simultaneously, under current legislation on death, with life insurance there is a potential 40% tax bill. Asking your insurer to write your policy into trust could be a free, simple way to ensure the tax man doesn't take a hefty slice of your loved one's money ! However, its advisable to still make a will anyway.

Income PHI or ASU Protection

Income protection or (PHI) Permanent Health Insurance pays out a tax free monthly income on long term sickness or accident (but not unemployment) protecting you - usually up to retirement. (ASU / PPI) Accident Sickness Unemployment Payment Protection policies covers mainly mortgage and loan finance - but only pays out for 12 / 24 months & is an annually renewable contract. Consider having both if your employment provides limited or no cover.

Guaranteed Insurability or New Cover

At certain life stages - such as marriage, birth of a child or buying a new property - your current plan may automatically have the right to increase your protection cover up to certain pre-agreed limits & without the need for another medical. If you have had medical history problems since that current plan started, this maybe cheaper & more preferable than re-underwriting a brand new policy.

Term Life or Whole Lifecover

Term life plans are usually the cheapest type of plan, as they will end by a certain date - thus are the usual option to cover say a mortgage, loan or to when any children become independant. Term plans usually stop by age 85/90. Whole lifecover will always pay out, whenever death occurs - but is the more expensive option. Note typical advertised over 50+ lifecover plans that involve no medicals, are even more expensive wholelife cover option.

Disclosure or None Disclosure

Forgetting to disclose relatively minor or major health issues could result in your policy being void by not paying out due to non-disclosure. Whether it's family history, smoker status or the occasional bad back, make sure you disclose this to the insurance company. If in doubt, tell your insurer and let them decide ! However, if you have given up all forms of tobacco for 12 + months, then you may reapply for cover using non-smoker rates.

Critical Illness or Serious Illness

When checking critical illness insurance policies, do not assume you can determine the cover benefits by cost alone - also that they will pay out on all types of critical illness but not less serious illnesses. Some plans cover only basic types of critical cancer, others cover from 25 up to 150 types of critical or serious illnesses. Consider a buyback option for extra benefit. Note: Income PHI protection will cover most serious illnesses.

Reviewable or Guaranteed Premiums

Some of the cheapest plans are reviewable annually or 5 yearly - which means that their premium costs may therefore rise every year or every 5 years. In the long run this therefore may work out be far more expensive than a guaranteed premium plan. Even though you may have bought a policy which has this structure, it's worth shopping around to see if you can get a better deal with non-reviewable guaranteed premiums.

Income Cover ~ Critical Illness ~ Life Cover ~ Mortgage Protection