The basic principle of life insurance is extremely simple. You are protecting yourself during a set period of time in case you pass away.
With the different range of policy products available and potential exclusions to each life insurance product. It can be very complicated to understand, let alone make the best choice on the protection for you and your family. At Life Insurance Cover we aim to be as helpful as possible and help our customers through our expert team. Ensuring all policies are explained completely jargon free and all the small print explained including policy exclusions.
In This Guide:
Different Policy Types
At the beginning of the process of buying a life insurance policy. You will have to choose one of the three types of life insurance policy available: whole-of-life, level term insurance and decreasing term.
Whole-of-life cover: This policy type will pay an agreed amount of money in the event of your death, no matter when that is. Whole of life cover can be more expensive than the other two policy types. This is because it does not have a time limit on it.
Level Term insurance: will offer protection to you for a fixed period of time. If you pass away during the cover period the policy will make a payment to your family/ beneficiaries. The amount they would receive would remain at the value you had insured against. However if you survive the term period it will expire and leave you un-protected.
Decreasing Term insurance: This level of cover is usually the cheapest option available. It will offer the same as level term insurance. But the amount payable to your family or beneficiaries will decrease over time. Similar to level term insurance, if you survive the policy term, the policy will expire.
After deciding on the level of life insurance you would like to purchase. It is important to understand the policy wording. It will include certain exclusions and certain conditions. Which have to be met in order for your policy to actually pay out within the small print.
Full Disclosure To The Insurer
When it comes to the purchase of insurance, not only life cover but all insurance protection including car, home, boat, lifestyle etc. It is very important to fully disclose any medical issues, lifestyle choices that could be detrimental to your policy.
As the insurance provider is agreeing to offer protection to you for a fixed monthly cost, with a potential claim payment in the future. An insurance provider is acting totally within their rights if they cancel your policy. If they subsequently find that when applying. That you did not disclose all of the “material facts” that may relate to your cover.
Initially this may seem to be quite harsh to a new customer, however each insurance policy is calculated on risk. If you attempt to mislead or get cheaper life insurance protection by withholding key information. An insurer will not have any alternative as the relationship must be transparent.
When you first begin your application for life insurance. They will make every effort to ask any and all relevant questions during the application process. This is not to pry into your personal circumstances, but to better understand the risk you are looking to insure.
However, while the insurance company will make every effort to ask all of the necessary questions, the burden is still on you, as the customer, to make sure you fully disclose all information that could impact the validity of your policy.
The Small Print & Policy Exclusions
Many mainstream life insurers do exclude certain people from being covered. Based on the potential for excessive risk associated with their personal circumstances. However if a mainstream life insurer cannot offer protection to you. Life Insurance Cover works with all the life insurance providers including specialist insurers to protect almost everyone.
Occupation: All different job types have a level of risk, if you work in an office or a shop or other low risk job, coverage should not be an issue. If however you work off shore or within the armed forces, you may need a specialist insurer. Our team will help you to find the perfect policy for you.
Lifestyle Choice: Everyone makes different lifestyle choices every day, some choices can involve considerable health risks. If you are a current smoker then you would need a specialist insurance policy. If you enjoy taking part in particularly risky sports or past times like sky diving or motor sports, then obtaining a cost effective insurance policy may be a little more challenging.
Medical Conditions: If you have a family history of or genetic tendency towards certain serious health issues like diabetes or very high blood pressure, you might also have trouble taking out a normal life insurance policy. However at Life Insurance Cover we have specialist providers for many medical conditions.
As well as the general exclusions based on your lifestyle, there are certain circumstances under which many life insurance policies will not pay out, for example:
If the death of the insured party is self-inflicted
Death is caused by misuse of drugs or alcohol
Due to involvement in terrorist activity or war
Caused by reckless activity or gross negligence
Some of the above listed exclusions are time limited from the time of buying life insurance. Our team of specialist advisors explain all of the potential shortfalls and exclusions within each policy. You should always check the policy’s small print in order to work out exactly under what circumstances your policy might become invalidated.
As well as issues with exclusions. The small print within the policy documents will tell you things like whether or not your premiums are fixed throughout the policy’s term. Almost all life insurance policy premium costs do not increase after a certain time period or according to any health problems you might acquire during the duration of the policy.