What are the most important questions to ask about life cover before choosing a policy?

Asked by lpmartine

4 Answers

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Answered by John Stirling, IFA in Saffron Walden, ESSEX
You should start at the basics;

Why do I need life cover?

That should help answer the following;

How much do I need?
What payment profile do I need (lump sum or income)?
How long do I need cover for?
Does how much I need increase, decrease, or remain constant over time?
Do I need it to be under trust (a complex and very important consideration, which you may need to take advice to answer)?

Then moving to more personal questions;

Will my health affect which providers might cover me, or how much I have to pay?
Am I the only one needing cover, or should others be included?
How much can I afford (no point in starting with tiptop cover only to lose it because you can't pay the premium)

Finally in relation to the provider;

What 'benefits' apply to the policy (some have guaranteed insurability for future events such as having a child or moving home)?
Will the premium ever alter (some offer guaranteed rates, some will be reviewed at points through the plan)?
Can I alter the plan if my situation changes (some can, some can't)?


There are some other issues too, but that should certainly get you on the right track. Best of luck.

John
| 12.03.10 @ 10:52
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$commenter.renderDisplayableName() — {comment} | 09.20.17 @ 18:06
Answered by Richard Salter, IFA in Trowbridge, WILTSHIRE
First you should work out whether you need life cover at all. Young single people with no physical or financial dependants may well not need any life cover. Once you have determined if you need cover then work out how much and for how long. To cover a mortgage will typically give clear answers to both but bear in mind any death in service cover or other existing benefits. | 12.03.10 @ 15:57
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$commenter.renderDisplayableName() — {comment} | 09.20.17 @ 18:06
Answered by Darren Smith, IFA in Basingstoke, HAMPSHIRE
The key with "life" cover is that it pays out on death - that is the key function. if you also have a need to be paid on a loss of income (partial or full) due to ill health or diagnosis of a critical illness - this is a much more involved area and a good reason to use an IFA who will assess what type of cover is needed based on your discussions and then they will research the cover options and the companies.

life cover (pure life only) is the only cover you can consider choosing on cost alone, with all other types of cover you need to give serious consideration to what level of benefits your premium is buying - cheaper is not always better on income protection and critical illness cover - but that is not to say that the most expensive will be the best! | 12.07.10 @ 13:25
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$commenter.renderDisplayableName() — {comment} | 09.20.17 @ 18:06
Answered by Paul Ross DipPFS CII(MP&ER), IFA in Bourne, LINCOLNSHIRE
The key questions are dependent on your circumstances:
1) Why do you want life cover?
2) and what is it to cover?
3) How much cover do I need?
4) Over what term do I need this cover for?
5) Who is to benefit upon my death?
| 12.08.10 @ 05:00
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$commenter.renderDisplayableName() — {comment} | 09.20.17 @ 18:06
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Answered by

John Stirling
John Stirling, IFA in Saffron Walden, ESSEX

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