Life insurance myths are debunked in this comprehensive…
Life insurance is a type of policy which pays your loved ones a cash lump sum if you pass away during the term.
While the premise is simple enough, many people have additional questions, or are intimidated by what to expect when applying for life insurance.
While there are multiple factors you should consider, the process can be easy if you know what you’re doing or have the right support.
Reassured have compiled this handy guide to provide their top life insurance tips below.
Keep reading as we discuss Reassured’s top 10 tips:
Plus, look out for our pick of frequently asked questions when applying for or buying life insurance.
When you apply for life insurance, you’ll be asked multiple questions to determine the best life insurance policies to meet your needs.
Questions you'll be asked include:
While it may feel invasive needing to disclose all this information, it’s necessary to ensure your policy is accurate and your cover valid.
Reassured’s friendly and professional team could help you secure an appropriate policy that is tailored to your requirements. Simply get in touch.
FAQ - What happens if I have a pre-existing condition?
You’ll be required to disclose any pre-existing medical conditions (a condition that exists or existed at the point of application) as it could affect your cover.
Conditions are usually split between ongoing/manageable conditions and more serious/potentially life-threatening conditions. However, the list of pre-existing illnesses can vary, or be categorised differently between providers.
It could still be possible for many to secure cover with pre-existing conditions.
Reassured have a specialist impaired life insurance team on hand to help applicants who have previously been declined. Simply contact us to see if we can help you secure some form of cover.
To determine how much life insurance you require, look at your financial commitments and any financial protection you may already have.
If you have savings, death in service benefit from your employment or another form of insurance if you were to pass away, factor this into your level of cover.
It’s important to ensure you’re only covered for what your loved ones require if you pass away. Otherwise, you could find yourself paying a higher premium than is necessary.
Life insurance could help your family to cover:
It’s also important to check your monthly budget to determine how much you can afford. If policy premiums are unpaid, your policy would be terminated, and you would no longer be covered.
If you find the premium for your required level of cover is too high, you could reduce the sum assured in order to lower the premium to an affordable monthly amount. You’ll have to assess whether this is the right decision for your circumstances.
Our helpful life insurance calculator below can help you establish how much cover you need:
FAQ - Do life insurance policies always pay out?
In the UK, the vast majority of life insurance policies are paid out.
In 2021, 97.3% of all term life insurance policies were paid out, with 99.99% of whole of life insurance policies being paid out.
The main reasons life insurance policies won’t pay out are the following:
Term-based life insurance expires after the cover period finishes, meaning it’s possible to outlive your policy. Any claims made after the policy’s expiry won’t be successful.
Any policy with outstanding premiums may also not pay out to your loved ones.
Furthermore, if your death is through a condition which has been excluded on your policy, your loved ones may not receive the sum assured.
However, rest assured that the majority of life insurance policies pay out.
Reassured can help you compare quotes from providers with high pay out rates (for example, in 2022, Aviva paid out 99.4% of all life insurance claims).
Once you’ve established how much cover you require, you need to determine the best policy type for your needs.
Choosing the right policy to meet your needs is essential in securing the financial future of your loved ones.
At Reassured, we can help you compare the following policies:
All policy premiums through Reassured are agreed at the point of application and are fixed throughout the policies lifetime.
Due to the guaranteed nature of life assurance products, (whole of life insurance and over 50s life insurance) premiums can be higher on these products.
The below tables show examples of quotes based on a non-smoker, in good health and £100,000 of cover:
|Age||Level term life insurance cost per month (20-year term)||Decreasing term life insurance cost per month (20-year term)||Whole of life insurance cost per month|
The below table shows the cost of over 50s life insurance. Quotes are based on a non-smoker for £10,000 cover (unless otherwise stated):
|Age||Over 50s life insurance cost per month|
|75||£75 (for £7,669 of cover)|
|80||£75 (for £4,634 of cover)|
It’s also important to consider whether a product has terminal illness cover included or if critical illness cover can be added and whether you require this on your policy:
Critical illness cover - A type of cover which provides a cash lump sum if you have a serious, life changing illness which isn’t terminal.
This usually covers around 30 critical illnesses, including cancer, heart attacks and strokes. However, the exact list of illnesses can vary between providers.
A claim can be made to help cover additional care costs, home adaptations and quality of life changes. The policy expires upon a successful claim.
This can be included with term-based products for an additional cost, or purchased separately through some providers.
Terminal illness cover - Allows you to make an early claim if you’ve been diagnosed with a terminal condition which has given you less than 12 months to live. The funds received can help to cover end-of-life care costs and other requirements.
Successful terminal illness claims terminate the policy. This is included as standard with term-based products and can be added to over 50s life insurance with some providers.
FAQ - What’s the difference between term life insurance and whole of life insurance?
Term life insurance will only last for a set period and will expire once this period ends.
It includes terminal illness cover and can include critical illness cover for an additional cost.
Because the pay out is not guaranteed, as your cover may expire before you pass away, premiums are often significantly cheaper than whole of life policies.
Whole of life insurance (a form of life assurance) lasts until you pass away, guaranteeing a pay out, and doesn’t include critical or terminal illness cover.
It’s essential to complete your application accurately in order for your policy to be valid.
You should always disclose any pre-existing conditions, family medical history, or lifestyle factors, such as whether you smoke.
If you intentionally provide false information or withhold details, this is known as “intended non-disclosure”.
As well as being a form of insurance fraud, it can prevent a pay out from being made and can invalidate your policy.
For example, if you say you don’t smoke and then die of a smoking related illness, your insurer will likely need to further investigate your cause of death.
If the insurer found that you lied, the claim would be unsuccessful, your policy would become void, and your loved ones would receive nothing - wasting your selfless investment.
Our friendly team can walk you through every step of the process and answer all your questions, ensuring the application is completed correctly.
If you’re worried about your pre-existing condition impacting your life insurance options, our dedicated specialist impaired team may be able to help.
FAQ - What happens if I provide inaccurate answers?
Providing inaccurate answers can invalid your life insurance policy, meaning a pay out could be denied when the time comes.
If you've unintentionally provided incorrect information, or missed something, it’s important to notify your insurer as soon as possible. Your cover might not reflect your circumstances if you pass away before informing them.
If you’ve intentionally provided inaccurate information, or left important details off, a claim made on your policy will be unsuccessful and your policy would be terminated.
Writing your life insurance in trust is a free process which puts someone in charge of your life insurance policy once you’ve passed away (a trustee).
Most people will choose someone they trust (who is over 18 and has a UK bank account) who can delegate the sum assured as per policy holders wishes once they’ve passed away - similar to a Will.
Any estate that is valued above £325,000 if you’re single, or £650,000 if married or widowed, is subject to 40% inheritance tax.
Your estate is comprised of your home, savings, any land you own, physical assets including jewellery and your life insurance.
For example, if the sum assured on your policy is valued at £100,000, this would increase the value of your estate by £100,000.
By writing the policy in trust, this separates the policy from your estate. This means you can avoid/minimise inheritance tax for your loved ones, allowing them to receive more of the intended life insurance sum.
Your executor will need to confirm they are in the position to legally administer your estate. This is known as probate.
This can take an average of 6 - 9 months to resolve and for beneficiaries to receive their part of the money.
Writing a policy in trust can result in claims being potentially made as soon as a death certificate is produced. This results in a lengthy probate process being avoided/minimised and any money being received quicker.
Reassured can help you write most policies in trust, free of charge. Simply contact us and our friendly, dedicated trust service team can see if your policy is eligible.
FAQ - Does life insurance count as an asset?
Yes, life insurance counts as an asset which contributes to your estate.
However, writing your policy in trust detaches it from the rest of your estate and can help to avoid/minimise inheritance tax paid on the sum assured.
A joint life insurance policy covers two people under the same policy.
This can make things simpler for a couple, as they’re only required to pay one premium between them.
You’ll need to put both you and your partners information on the application. Premium prices are then determined by how much risk you impose on the insurer.
Risk factors for both people on a joint policy are taken into consideration. For instance, if one person had a pre-existing condition but the other didn’t, the price would still be increased due to the condition.
On average, if both people on the policy have a similar age, health and smoking status, they could save money through joint life insurance.
The table below depicts the cost of two single policies and a joint policy.
Quotes are based on non-smokers in good health, for a level term policy with a 20-year term length and £100,000 of cover:
|Age||Two single policies||Joint policy||% Saving|
It’s important to note that once one person has passed away and a claim is made, the policy is terminated.
This leaves the remaining person on the joint policy with no life insurance cover, meaning they would require a new policy.
It’s also important to determine whether it’s more cost-effective, in the long run, to secure two single policies (to provide two separate pay outs) or joint life insurance (which may require an additional policy at a later stage).
FAQ - Is it better to have joint life insurance?
This depends on what’s most important to you when taking out a policy.
If you’re looking for the cheapest quote, then joint life insurance may be sufficient for your needs. However, two single policies could result in two pay outs once you’ve both passed away.
It should also be noted that joint life insurance policies aren’t very flexible. If you and your partner divorce, it’s unlikely a joint policy can be split - something which doesn’t impact two separate policies.
It can be difficult and time-consuming looking for the best available life insurance deal. However, it’s essential to compare as many quotes as possible to find the policy which suits you.
This is why you should consider using a life insurance broker, like Reassured.
Not only can Reassured save you time but we’re also able to compare quotes from some of the UK’s best life insurance providers and smaller specialists. Furthermore, we can also personalise all quotes to your individual needs.
You’re under no-obligation to accept any of these quotes and, best of all, quotes are fee-free.
If you’re struggling to get your head around the application process, Reassured can assist you with its completion and ensure all your details are correct.
Our priority is to find the right policy for you, we do this by providing all the information you require and allowing you to make an informed choice.
Our UK based call centres will be happy to assist you with finding a policy. Simply contact us.
FAQ - What is the best strategy when shopping for life insurance?
When shopping for life insurance it’s essential to compare quotes from multiple providers.
Talking to a life insurance broker like Reassured can help you find an array of personalised quotes to meet your needs.
If you haven’t quite determined how much cover you need or which policy is best for you, Reassured can provide all the information to help you make an informed decision.
Did you know, it’s also now possible to buy life insurance online through Reassured? This gives you complete control over when and how you buy your life cover.
Head over to our dedicated buy life insurance online page to find out more.
Before you buy your policy, it’s important that you understand all the information.
If there are aspects or jargon that you’re unfamiliar with, make sure you ask for clarification before agreeing to a policy.
Similarly, it’s worth checking what’s included and not included on your policy.
If you have a pre-existing medical condition, or family history of one, it’s worth confirming if these are covered.
If they weren’t and you passed away due to this condition, your loved ones wouldn’t be entitled to a pay out.
At Reassured, we can translate any jargon on the application to help you understand what’s being asked. We’re also on hand to answer any questions you may have throughout the process, including the policy inclusions.
FAQ - What should I do if I have questions about my life insurance?
Talk to your insurer or broker if you used one, who'll be able to answer any questions relating to your policy.
When choosing Reassured as your broker, you’ll benefit from our UK based and award-winning call centres.
We’re also rated “Excellent” with over 65,000 reviews on Trustpilot.
Once active, it’s important to review your policy if any major changes happen in your life.
This can include your marital status, obtaining a mortgage, additional dependents, or if you have been diagnosed with a medical condition.
While you’re not obliged to inform your life insurance provider about these changes, it’s worth checking to see if the level of cover you have is still suitable to meet your new circumstances.
For example, if you move to a bigger home, you may find that your current sum assured isn’t sufficient to cover your new mortgage if something was to happen to you.
In situations like these, there are two options. You can either purchase new life insurance which reflects your current situation, or you can check if your insurer has a special events (or guaranteed insurability) clause.
This clause gives you the option to make amends to your existing policy to accommodate these new changes, without the need to provide additional medical information.
This could allow you to change the beneficiaries on your policy, the sum assured, or the length of the term.
Please note that not all providers offer this option. If your provider doesn’t, you may need to take out a new policy to replace your old one, or have the difference covered with an additional policy.
You can have more than one life insurance policy, however, this will also result in multiple premiums. Review your policy periodically to ensure it still meets your needs.
Reassured can help you to secure a life insurance policy which includes a special events clause, simply get in touch to find out more.
FAQ - Can I change the cover if I need to?
You’ll need to check with your provider if your policy has a special events clause.
If it doesn’t, you may need to cancel your existing policy and replace it with a new policy or you could set up an additional policy to cover your new life changes.
The below table gives a quick summary of what you should and shouldn’t do when applying for life insurance:
|Only take out the amount of cover you need||Lie on your application|
|Take out life insurance as young as you can||Take out the first policy you find - shop around|
|Quit smoking and be active to get the best deals||Set up a policy with an unaffordable premium|
|Work out in advance why you need cover||Miss paying the premiums|
|Check what current financial protection you have (such as death in service benefit through your employer)||Take out a policy you don’t fully understand|
|Make sure you fully understand the policy and ask questions||Ignore your policy once it’s been set up|
|Compare quotes to find the best deal|
|Review your cover regularly|
We hope you now feel more confident about what to expect and what to do when applying for life insurance.
Why not contact Reassured to compare life insurance quotes from top UK insurers?
Not only can we help you to compare quotes but we can also provide you with all the information you need to make a fully informed decision about your life insurance.
Our dedicated team can walk you through the whole application process and can assist you every step of the way.
We’ll provide you personalised quotes which are no-obligation and completely fee-free.
The best part is, life insurance through Reassured starts from just 20p-a-day. Simply get in touch.
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Yes very pleased with my choice very helpful easy to understand and very pleasant transaction all good!Mrs M Rushworth
Very professional and reassuring. Life insurance sorted in about 10 minutes.Stephen Davies
very courteous and friendly. Polite professional and empathic.Stedroy Fenton
Another happy customer I am. They are very professional and kind. Fully communicative. I recommend.Piotr Stepien
Really attentive during the call, good clear guidance throughout. Well done.Michael Reynolds
Amazing service quick fast and easy and Joey was a star on the phone really help me thanks.Sera Woolley
I made the right choice and now I feel relieved that I did.glyn
Really genuine kind and compassionate team with great knowledge and friendly approach highly recommend them!Katelia Merritt
I must say Jake took me through every step and was brilliant, recommend them anytime.Allan Green
Very happy and everything explained well, so glad a took the time to take the call, normally I would say I'm busy. But compared to other company's we save so much more money.Jenny Berry