The availability of insurance products over the Internet can make getting the best possible deal in the shortest possible time seem like the end goal where any type of insurance is concerned. This approach works well for motor and home policies, as these are products which customers buy annually, and so any shortcomings which come to light with, for example, the product basis, or administration processes of the insurer, can be swiftly dealt with at the next renewal by changing insurer and/or policy. Life insurance is a little different.
Whilst price comparison and cashback sites may offer life insurance at competitive premiums, ensuring that a policy is fit for purpose is paramount, and this is an area where it is important to consider taking professional advice.
Life insurance is designed to financially safeguard loved ones, and policies will normally run for a number of years, with some more expensive types offering the facility to be in place for life. Moreover, obtaining life cover is dependent on health and age. The proposal form will include questions regarding the potential policyholder’s current state of health, and any existing medical conditions. Where the amount of life cover required is relatively modest, and there are no major health issues, insurance is likely to be offered in a routine way, and once in place, and assuming premiums continue to be paid, a contract exists between the client and insurer for the term of the policy.
The insurer will ask their underwriters to look more closely at applications for insurance where a larger amount of cover is requested, or where health issues are of concern. To put this bluntly, the insurer is looking at the likelihood of having to pay out a death claim, and where a client is in poor health, the level of risk to the insurer is increased. In response to this they may offer cover with rated terms (meaning higher premiums), or decline the policy altogether.
Given these considerations, looking for sound advice and adequate, suitable cover should override purely cost based research. Obtaining the right amount of financial protection, and not over or under insuring oneself, can often be better achieved after taking professional advice, and as part of a financial planning review.
Life insurance is, in fact, usually the initial primary consideration in such an exercise. All good insurance brokers will look at affordability with their clients before being able to make any recommendations to address needs, however, the first advice clients are likely to receive will relate to protection, which usually involves the consideration of some type of life insurance product. This might commonly include compulsory cover to insure the investment of a mortgage lender, protection for a family or inheritance tax planning.
It is also possible to combine life insurance with critical illness cover. This is something that financial planners may offer their clients the opportunity to look at, and, whilst it will increase the cost, combining these two types of insurance is common, and well worth giving consideration.
Everyone’s circumstances tend to change over time, so it may be that once suitable policies are no longer needed, or that it is time to think about different forms of protection or savings. Taking an overall look at your financial situation from time to time gives ongoing peace of mind, and maintaining adequate life insurance is a fundamental part of this process.
