Life Insurance FAQs
Life insurance made simple with our extensive Q and A of popular questions.
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How are Life Insurance premiums calculated?
The cost of life insurance depends on two factors: how much cover you want and how long you want it for. Your age, sex, occupation, health and smoking habits are also taken into account.
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Why do I have to provide details about my health?
The Life Assurance company must decide whether or not you are an acceptable risk. If you or any members of your family have had a history of illness, they will want to check on your general state of health before deciding on the premium to charge.
The Life Assurance company will usually be able to offer terms without the need for you to undergo a medical. However, they do have the right to request an examination if they feel it is necessary.
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Can I have a joint policy that covers my partner and myself?
Yes. These are known as joint life policies, which will pay out if either of you should die during the lifetime of the policy. If the second person is not your spouse then you need to prove that their death would cause you a financial loss.
When either of the parties dies, the sum will be paid out and the Joint policy will be terminated. This means that the second party will be left uninsured, sometimes at an age where they will find difficulty in obtaining replacement cover. Always consider whether 2 single policies will be more appropriate for your needs.
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What happens if I stop paying the premiums?
In the majority of cases, the Life Assurance cover will lapse. If you want to reinstate the policy at a later date then fresh medical evidence would generally need to be supplied to the Life Assurance Company before cover could be reintroduced.
Unless you have an Endowment Assurance or a Whole of Life Assurance that contains an investment element, then you are unlikely to receive a return of any of the premiums you have paid. Even in the case of Endowments or Whole of Life plans you may not get back all of the money you have paid to the policy.
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Who Can Sell Life Insurance?
Anybody can sell life insurance for protection purposes. This may include financial advisers, insurance companies or brokers, solicitors or accountants. However, they must be authorised by the Financial Services Authority or have an arrangement with an authorised firm who will take responsibility for their actions.
