What is life insurance?
Life insurance is a great way of ensuring that your loved ones are taken care of financially if you were no longer around. It is a cost-effective way of offering your family protection while providing you peace of mind.
If you pass away within the policy term, your family/dependents will benefit from a lump sum pay out from the insurer, as specified by your cover.
Does Reassured give advice to customers?
No. We do not advise you as to which policy you should take out, as this is a decision that requires a deep understanding of your individual circumstances. We are what is known as a ‘non-advised‘ broker.
What we do, is use our in-depth knowledge of the life insurance industry and the personal information you provide, to find you the perfect policy, at the very best price.
We can also provide plenty of information about your chosen policy, explaining any terminology or jargon you do not understand. Allowing you to make your own, informed decision.
If you require professional advice on taking out life insurance, we would be happy to put you in touch with an independent financial advisor.
Does Reassured charge a fee?
No. We never levy any fees or admin charges on our customers. We get paid by the insurers on a commission basis when you sign up for a life insurance policy.
What is the term (or policy term)?
The ‘term‘ refers to the length of time you are insured for, as specified by your policy. Most insurers allow you to choose from terms as short as 5 years, right up to 40 years or more.
In order for a pay out to be made the policyholder must pass away (or becoming critically ill depending on the policy) during the policy term.
What is the guaranteed sum assured (or pay out)?
The guaranteed sum assured refers to the amount of cover you have taken out. This is also the sum your beneficiaries will be paid out if a valid claim is made.
If you have £150,000 of life insurance cover, then your guaranteed sum assured will be £150,000.
Sometimes the guaranteed sum assured is referred to simply as the ‘pay out‘.
What is level term insurance?
Level term is a type of life insurance which covers you for a fixed period of time, (or term). The amount you are insured for remains the same throughout the policy. Usually, your premiums payments remain fixed too.
Regardless of whether you pass away in the 1st year or the 39th year of the policy (as long as the term has not elapsed), the pay out your family receive will be the same.
What is decreasing term insurance?
Decreasing term is a type of life insurance which covers you for a fixed period, (or term). However, unlike with level term, here the pay out amount on your policy reduces over time.
This type of policy is usually taken out by homeowners to cover a repayment mortgage in the event of one or both of them passing away.
As the amount owed on the mortgage decreases over time, so does the amount paid out by the insurance policy. These policies tend to be more affordable as a result.
What is whole of life insurance?
A whole of life policy guarantees to pay out a lump sum when you die, (whenever that is). There is no set term. The size of the pay out depends on your particular policy.
Some policies allow you to stop paying in premiums once you reach a certain age (i.e. 80 or 85 years). While others require you to pay monthly premiums right up until you die.
Because a pay out is guaranteed at some point whole of life policies tend to be more expensive compared with term-based cover.
What is an over 50s plan?
Over 50s life insurance or ‘over 50s plan‘, as the name suggests, is a life insurance policy specially designed to meet the unique needs of people aged 50 and over.
You pay in a fixed, monthly premium that you can afford and the policy will pay out a fixed, cash lump sum to your beneficiaries, upon your death.
These plans are popular with seniors because usually you are guaranteed acceptance and there is no medical exam.
What is critical illness cover?
Critical illness is generally an optional add-on to a term-based life insurance policy, although it can be a standalone product too.
As well as paying out if you die, the critical illness element will also pay out if you become seriously ill with a condition covered by your policy.
You will pay one premium and the policy only ever pay out once – if you become critically ill, or if you die (but not both). Funds can be used to provide a welcome financial cushion if you are no longer able to work.
What is terminal illness cover?
Terminal illness cover is provided free of charge on every life policy we quote for. This additional cover means you can obtain your life insurance pay out early if you are diagnosed with a terminal illness.
A medical professional will determine that an illness is terminal if it is likely that you are going to pass away from the condition within 12 months.
What is family income benefit?
Family income benefit is a form of life insurance, however, unlike traditional policies that pay out a lump sum, family income benefit provides the beneficiaries with a monthly, fixed, tax-free income.
Payments run from the date of the policyholder’s death, until the end of the term, as detailed by the policy. No benefit is provided if a claim has not been made by the time the policy expires.
What is impaired risk (or impaired life)?
Impaired risk, sometimes referred to as impaired life, refers to any life insurance applicant who does not meet the standard criteria to obtain the most affordable rates.
Impaired life signifies that you are a higher risk to the insurer and therefore more difficult to insure. For example, you may have suffered a stroke or heart attack. This generally results in higher premiums.
Is life assurance the same as life insurance?
Officially no. However, the terms ‘assurance’ and ‘insurance’ are commonly used to mean the same thing.
Life assurance provides a payment when you die, no matter when that is. Whole of life cover is an example of life assurance because a pay out is assured. Life insurance only pays out upon the death of the policyholder within the policy term. Level term cover would be an example of life insurance.
In summary, you insure something that could happen, while you assure something that will happen.
What is writing a policy in trust?
Writing a policy into trust means your policy is managed by a nominated trustee until you pass away. As a result, your life insurance policy avoids forming part of your legal estate and the benefit can be paid directly to beneficiaries.
The key benefits are, you could avoid inheritance tax (40% over the £325,000 threshold) and the pay out is issued faster because your dependents will not have to wait for probate to be granted.
We are happy to discuss information on trusts with you and have an in-house trust team to support you, (for no fee). Although we can not advise you.
What are premiums?
A premium describes the amount you pay for your life insurance cover, based on your individual circumstances. Premiums are normally paid monthly, although it is possible to pay annually.
Guaranteed or reviewable premiums?
When taking out life insurance you have the option of paying either a guaranteed or reviewable premium.
Guaranteed premiums ensure the monthly cost of your cover remains fixed for the duration of the policy term. Reviewable premiums mean the insurer has the right to increase your monthly premium during the term.
Initially reviewable premiums tend to be cheaper, however over the course of the whole term you could end up paying more.
How are my premiums calculated?
Multiple factors. The cost of your premium will depend on a number of key factors, including your age, medical history, lifestyle, weight/height (BMI), occupation and hobbies, as well as whether you smoke.
The type of policy, the length of the term and level of cover you choose will also affect the cost of your premium.
Who qualifies as a smoker?
In life insurance terms, smokers are not just those who smoke cigarettes or cigars – they also include people who have used any nicotine-containing products in the past 12 months.
This includes nicotine replacement products, such as e-cigarettes, patches, gums, and inhalers, as well as traditional cigarettes.
Does a joint policy pay out twice?
No. A joint policy covers both parties, but only until one person dies. If you both die at the same time, the policy will still only pay out once.
After one person dies (usually on the first death) and the insurer pays out, the policy expires and the remaining partner becomes uninsured.
How much life insurance cover should I get?
You choose the amount that you are insured for. Generally, the more cover you want, the more expensive your policy will be.
You need to ensure all the things you want to be protected are, such as the mortgage or rent, funeral expenses, future living costs, children’s education and income replacement.
Can I increase my life cover at a later date?
Yes. When your life circumstances change, you may wish to change the amount of life insurance cover or the term you have.
Events such as getting married, buying a new house and having children can all affect the amount of cover you need, and most insurers allow you to make changes without an additional medical.
Talk to our Reassured consultants about your individual circumstances to find out which policies best meet your changing needs.
What if I become ill and cannot pay my premiums?
If you stop paying your premiums, even if you become ill or lose your job, your policy will be cancelled and cover will cease. However, if you want to protect yourself against situations like this, you may consider taking out a waiver of premium feature on your policy.
This means your payments are covered if you are still off work after a period of 26 weeks. Talk to our Reassured consultants to find out more about this option.
Can I protect my policy pay out against inflation?
Yes. To ensure your policy does not devalue, as living costs rise, you can opt to apply indexation to your policy each year.
This means that both your pay out and your premiums will increase in line with inflation, which is usually determined by the Retail Price Index (RPI).
Can I take out multiple policies?
Yes. You are allowed as many life insurance policies as you wish, and are welcome to take out additional cover even if your employer is already providing some protection.
However, insurers may ask questions if you wish to insure yourself for a large sum, (in excess of £300,000). If you wish to have a high level of insurance, you may need to prove a need for this cover.
Must I research the market to get the best deal?
No. Not when you come to Reassured to find your policy. We will search the market on your behalf, comparing multiple quotes from some of the UK’s biggest names in life insurance, to find you the very best price.
We are never beaten on price, and will always work hard to find you the cheapest policy available to you. Saving you time and money.
Do I need life insurance to get a mortgage?
Sometimes. On occasions, mortgage lenders will stipulate that you have to take out a life insurance policy in order to obtain your mortgage, to mitigate their risk.
Either way, we believe having life insurance to protect your family home is a very good idea.
Do I get money back if I don’t die during the policy term?
No. Life insurance will only pay out in the event of your death, (unless you have critical or terminal illness elements on your policy). So if you do not die within the agreed term of the policy, you will not get anything back. However, in some cases, you can extend your policy for a further period of time.
If I cancel my policy will I get my money back?
No. Most insurance providers will allow you to cancel your policy at any point without any fines or fees. However, you will not get any money back if you decide to do this. Obviously, your life cover will cease after you have cancelled.
Is there anything that might stop a policy paying out?
The main reason that an insurer will refuse to pay out on your policy is if they think you have not disclosed something important. This could be to do with your occupation, your hobbies or whether you smoke or not.
If you are 100% truthful in your application to the insurance provider at the start of the policy, and if you make sure you keep them informed throughout the term of any major changes in circumstance, there should be no problem when the time comes to claim.
What is non-disclosure?
Non-disclosure refers to the withholding of information that could be required by your insurance company. It can also refer to the provision of false information to your insurer, or to not being entirely truthful with the answers you give.
If you deliberately falsify information or don’t disclose something that could affect your insurance premium, your life insurance could be declined.
Worse still, if non-disclosure comes to light after you have been accepted onto a policy, the insurer may not pay out in the event of a claim.
Do you offer instant life insurance cover?
Yes. We work in partnership with insurer AIG to provide customers with instant life insurance cover or quotations.