Actus are independent financial advisers who have been providing life assurance, pension and investment services to their clients for over 20 years. In recent times it has become apparent that holders of life assurance products tend not to have their policies reviewed periodically and as such are often overpaying considerably for the cover that they have. A review of one’s life assurance could result in either considerable cost savings or enable the holder to enjoy far superior cover to that which they have previously held without experiencing an increase in their current premiums.
Furthermore, many holders of life assurance products do not seem to be fully aware of the benefits that are afforded to them by their policies. Actus has, on a number of occasions, experienced clients who have suffered a critical illness and have held critical illness cover as part of their life assurance policies but have failed to pursue a claim against their policy or seek advice in relation to making a claim.
It may help at this stage to provide a brief explanation of the life assurance products available in the marketplace at this time:
Firstly the name life assurance typically refers to life assurance and life insurance products. By exact definition life assurance products have a redemption value to the holder at the end of their life whereas life insurance products are just that, “insurance” and do not have any value other than the benefits that they afford the holder in the event of a claim. Most life assurance products in the market place today are of the “insurance” type and typically used to protect loan liabilities such as mortgages or to provide family protection.
Of these life assurance products, we have “life only” cover and “critical illness with life” cover. “Life only” cover provides the holder with a payout in the event of death. Many life only policies also provide “terminal illness” cover whereby if the holder is medically diagnosed as likely to die within the next twelve months the policy will pay out as it would if the policyholder were to die. This affords the policyholder the benefit of settling their financial affairs before their death and, in many cases, gives them the financial ability to make the most of the remaining time available to them. “Critical illness with life” cover provides the holder with life cover but also adds the benefit of critical illness cover. Life only cover is relatively inexpensive as the likelihood of the policyholder dying within the term of the cover is low. The likelihood of someone suffering a critical illness during the term of their assurance is far greater and as such the cost of critical illness cover is considerably higher. Typically, critical illness policies will pay out in full on diagnosis of a specified critical illness. There may be more minor illnesses that will result in a partial payout but this appears to be an area where policyholders are sometimes not fully aware of the level of benefits available to them. Below are a few scenarios that you may consider if taking out life assurance for the first time or having your existing arrangements reviewed:
1) What level of cover do you require? If you have a mortgage liability of £250,000 but hold life only cover of £500,000 you might consider reducing this level of cover and taking up some critical illness cover. You could maintain protection of your overall mortgage liability on a life only basis but add a considerable level of critical illness protection. Don’t forget if you were to fall critically ill you will still need to meet your mortgage repayments and this may place financial stress upon you and your family. Critical illness cover may extinguish your mortgage liability or at least cover your repayments for a considerable time allowing you to focus on your medical treatment and convalescence without financial concerns.
2) Has your health changed in recent years? You may have given up smoking, lost weight, or taken up regular exercise. All of these could have an impact on the cost of your life assurance. Typically, smokers will pay double the premiums for life assurance compared to non-smokers so if you quit it literally pays to review your policy.
3) Does your life assurance policy have less than 5 years to run? The costs of life assurance will increase as you get older. If your existing policy is nearing expiry and you would like to have cover beyond this expiry date, you should consider reviewing now. There is no penalty for cancelling your existing arrangements and if you are in good health now you could extend the term of your cover considerably without incurring a large increase in premiums.
4) Have you considered individual covers? Life only assurance is relatively inexpensive and should you currently hold a joint policy with your partner this policy would terminate should one of you die and the policy pay out. The surviving partner may struggle to acquire new cover on their sole life. As you get older, you may consider taking individual life assurance covers to ensure cover is maintained on the surviving partner should one of you die.
At Actus we endeavour to ensure that you are provided with the best life and/or critical illness cover to suit your current needs. We understand that your assurance requirements will change from time to time as you experience changes in lifestyle and financial commitments. If you currently hold life assurance and are unsure as to its suitability for your current circumstances then contact Actus today for a policy review. It won’t cost you anything and you could gain considerable benefits when compared to your existing arrangements. Alternatively, if you are considering life assurance for the first time please call 766620 or email email@example.com to arrange an appointment to review your available options.