Life insurance, critical illness cover Etc. - you pay for Policies You Do not Need?

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One of the most common questions we see when we consider the situation for new customers is that over the years have been sold (or bought) many lives, Critical Illness and incomes policies.

Well of course it is important that such coverage, for example, a couple with a family and a mortgage is absolutely essential. And 'perhaps better, have' a bit "too much coverage, rather than a shortage, with serious problems if it was the worst case isCould happen.

However, it is also fair to say that probably is not that you would be happy to pay well over the odds for protection from year to year if it turns out that they do not need.

In many cases turns out to be the case, more particularly for clients aged between 45/50. This is because in almost every instance we think is questionable, many things happen that will protect instead.

The top few would be:

The policy itself is not "Best Value"
The client wasoverinsured beginning
The questions have not been revised for many years
NHS services have not been incorporated in the calculation of the deficit

I think the first three are obvious, but a look at the fourth edition here. Perhaps it would be appropriate to consider some examples of medical officer. In both cases, we assume that I am married with 2 children and have a mortgage.

We look at the life insurance and income protection only here, the numbers we use areis for illustration only.

Terminology

Term Assurance (TA) - lump sum life cover over a number of years.

Household Income Benefit (FIB) - the years of life cover monthly income over a certain number.

Permanent Health Cover (PHI) - monthly, taxation, income replacement usually 60 years.

These examples show that the NHS offers those services automatically, depending superannuable salary and length of service. If youbought, years, then this coverage will be further increased.

David to 40 years

He has 16 years in the NHS with a current salary of £ 100k pa Children 8 and 10 years and are likely to go to college. The debt is at its peak, and takes much of the monthly budget.

David has sold more life insurance, PHI and a plan costs, £ 100 per month total. When asked, David can not remember how the NHS benefits, saidalready.

Then cover, what would David NHS? Here we use only the minimum required to be received by the NHS if approved, how long to work or even die. This means, with Tier 1 benefits when calculating.

Death benefit - £ 200,000

The income is paid for the death of 20,000 - € pa

Income is paid for life on disability - £ 20,000 pa

These are very large sums, and if we understand what really amount to cover DavidNeeds, sometimes you can save.

Tom age 50

Tom has 26 years of service in the NHS, with a current salary of £ 110,000 per year, as some points of discretion. Children aged 20-22 are close to leaving the university, and the mortgage is much less. Its full protection not be monitored for 5 years has been, and he pays £ 140 Clock for its protection measures.

Tom's NHS benefits are:

Death benefit - £ 220,000

Income is paid on death- £ 35,750 pa

Income is paid for life on disability - £ 35,750 pa

As you can see, these benefits are higher, but the most important issue here is that reducing the protection needs Tom. But when these policies were purchased many years ago, is too easy to forget that they too irrelevant to their needs.

Results for GVP or GDP will be similar.

Of course, some policies have been designed by this time finished, but some go for manyYears. It must be made in this type of scenario in which a considerable saving in the rule.

Whether you are a financial adviser or a traditional fee-based planner (or Do It Yourself) you need a deficit to make the calculation and covers all existing benefits including the NHS.

Other tips are:

Removal of living together rather than each does not cost much more, and "double" your coverage as a couple (this also means that the survivors have their own area of coverage)
If youcritical illness and life cover to buy, be sure to compare both plans, combined, can be very cost-
ensure that all life is written in trust to cover planning, for help in inheritance tax
If you have Wills they write. If not now act Wills
sense for their enduring Powers of Attorney

Remember, every 1 € will not need to actions that you saved can be spent on what you really need.

Financial TipsBottom Line

It 'important that you know:

That you and your family will need in case of disaster
what you have right now, including the NHS benefits. If you are unsure about your NHS benefits, write, including the NI number and date of birth.

NHS Business Authority, Hesketh House, 200-220 Broadway, Fleetwood, Lancashire. FY7 8LG. Telephone 01253 774774 °

ACTION POINT

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Life Assurance Policies

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Definition: Life assurance can provide you with one of two main benefits: it can either provide your successors with money when you die or it can be used as a money saving plan to provide you with a lump sum (or income) on a fixed date. In recent years, however, both types of scheme have become more flexible and many policies allow you to incorporate features of the other. This can have great advantages but the result is that some of the definitions appear somewhat contradictory. There are three basic types of life assurance: whole life policies, term policies and endowment policies.

Whole life policies are designed to pay out on your death. In its most straightforward form, the scheme works as follows: you pay a premium every year and, when you die, your beneficiaries receive the money. As with an ordinary household policy, the insurance only holds good if you continue the payments. If one year you did not pay and were to die, the policy could be void and your successors would receive nothing.

Term policies involve a definite commitment. As opposed to paying premiums every year, you elect to make a regular payment for an agreed period: for example, until such time as your children have completed their education, say eight years. If you die during this period, your family will be paid the agreed sum in full. If you die after the end of the term (when you have stopped making payments), your family will normally receive nothing.

Endowment policies are essentially savings plans. You sign a contract to pay regular premiums over a number of years and in exchange receive a lump sum on a specific date. Most endowment policies are written for periods varying from 10 to 25 years. Once you have committed yourself, you have to go on paying every year (as with term assurance). There are heavy penalties if, after having paid for a number of years, you decide that you no longer wish to continue.

An important feature of endowment policies is that they are linked in with death cover. If you die before the policy matures, the remaining payments are excused and your successors will be paid a lump sum on your death. The amount of money you stand to receive, however, can vary hugely, depending on the charges and how generous a bonus the insurance company feels it can afford on the policy's maturity. Over the past few years, pay-outs have been considerably lower than their earlier projections might have suggested.

Options. Both whole life policies and endowment policies offer two basic options: with profits or without profits. Very briefly the difference is as follows.

Without profits. This is sometimes known as 'guaranteed sum assured'. What it means is that the insurance company guarantees you a specific fixed sum (provided of course you meet the various terms and conditions). You know the amount in advance and this is the sum you - or your successor - will be paid.

With profits. You are paid a guaranteed fixed sum plus an addition, based on the profits that the insurance company has made by investing your annual or monthly payments. The basic premiums are higher and, by definition, the profits element is not known in advance. If the insurance company has invested your money wisely, a 'with profits' policy provides a useful hedge against inflation. If its investment policy is mediocre, you could have paid higher premiums for very little extra return. The lack of money saving in this scenario could be depressing.

Unit linked. This is a refinement of the 'with profits' policy, in that the investment element of the policy is linked in with a unit trust.

Other basics. Premiums can normally be paid monthly or annually, as you prefer. Size of premium varies enormously, depending on the type of policy you choose and the amount of cover you want. Also, of course, some insurance companies are more competitive than others. As very general guidance, £50-£70 a month would probably be a normal starting figure. Again as a generalisation, higher premiums tend to give better value as relatively less of your contribution is swallowed up in administrative costs.

As a condition of insuring you, some policies require that you have a medical check. This is more likely to apply if very large sums are involved. More usually, all that is required is that you fill in and sign a declaration of health. It is very important that this should be completed honestly: if you make a claim on your policy and it is subsequently discovered that you gave misleading information, your policy could be declared void and the insurance company could refuse to pay.

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The Easy Way to Compare Life Assurance Policies With Discounted Premiums

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Do you recall when comparing life assurance policies used to take days and picking the right cover was a bit like playing the lottery? Thankfully, the life assurance industry has come a long way in the last ten years as a result of improved technology and the internet.

Even so, using the web to compare life assurance can tsill be a minefield if you don't do it in the correct way. For those looking to take out a policy, most will use one of the growing number of financial comparison services to search for a policy and a big criticism of them has been their over-reliance on price as the main consideration. Whilst this may be true, these sites are still a powerful tool as long as they are used in combination with some simple basic principals.

A Few Essential Questions To Ask Before You Start Searching For Life Assurance

Whilst access to online comparison services has simplified the shopping process for life assurance, there's a risk that they could cause some consumers to rely too heavily on their quotation results without first understanding what is the most appropriate cover for their needs.

As many life assurance plans are purchased with a term of ten years or more, a common arguement against price comparison sites is that price is not the only factor that should be assessed and compared as part of the buying process. This highlights the importance of policy features such as flexibility to adapt to changing priorities and how it affects the type, amount and duration of cover required.

Whether your circumstances are simple or more complicated, these questions can prove hard to answer on your own and you may find it easier to take advice from an experienced adviser.

Shop, Shop and Shop Some More

With the popularity of financial comparison websites and increased use of the internet, buying life assurance has now been transformed into a simple ten minute task that you can complete in your lunch break.

This is where some users trip up and make the mistake of restricting their quotations to just one website rather than comparing as much of the market as possible by using at least two. Limiting your shopping to just one quote comparison site also limits the range of your quotes and you could miss out on special deals not available anywhere else. Rather, be sure to use two or three of the major comparison services and come up with a shortlist of the most suitable policies.

This is where most people's research ends, but we're going to take it one step further and compare our comparisons against some discounted quotations.

How to Save Even More With Discounted Life Assurance

Having created a shortlist of premiums and policies quoted by the main price comparison sites, we're now going to see how much less you can pay by using specialist sites that apply a discount to their quotes. Whilst many of these discount quote sites don't compare as many policies and providers as the big price comparison sites, they often include the leading insurers and many smaller ones.

Above all, the main difference is that should any of these providers appear on your shortlist you're likely to save a further 5%-20%. It's quite possible to see quotes for exactly the same policies and providers with premiums discounted below those offered by the leading price comparison sites.

To find these brokers, just log onto your favourite search engine and search for discount life insurance.

Remember to Compare the Cover Too

Whilst we're all keen to pay as little as possible for our life assurance, it's also prudent to factor some additional features into your comparisons to ensure the long term suitability of your policy. Neglecting the importance of the following points could leave you with a policy that cannot adapt as your needs change over the cover term.

Can the policy adapt to changing needs? - because many life policies are taken out with a term of at least ten years, the cover should be flexible enough to change with your needs and circumstances once the policy has started. This re-inforces the need for a thorough comparison of cover features as well as price to avoid policies that may not be able to be altered in later years leaving you with no other choice than to take out extra cover or replace the existing one altogether when you may be years older and premium rates higher. Take a bit more time now and you will be rewarded with a policy that continues to give you the protection and peace of mind you want.
Can you add any cover after commencement? - the number and type of policy options can vary widely from company to company so it's important to be aware of what's available together with any terms and conditions before you buy.
How good is the customer service? - at the time of writing, there aren't any comparison sites that include customer service ratings in their quote results. A simple way to check this yourself is to do a search for the insurance company name and the word 'reviews' or 'customer reviews'. There are lots of websites dedicated to publishing reviews of companies and products written by genuine customers

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The Easy Way to Compare Life Assurance Policies With Discounted Premiums

Image : http://www.flickr.com

Do you recall when comparing life assurance policies used to take days and picking the right cover was a bit like playing the lottery? Thankfully, the life assurance industry has come a long way in the last ten years as a result of improved technology and the internet.

Even so, using the web to compare life assurance can tsill be a minefield if you don't do it in the correct way. For those looking to take out a policy, most will use one of the growing number of financial comparison services to search for a policy and a big criticism of them has been their over-reliance on price as the main consideration. Whilst this may be true, these sites are still a powerful tool as long as they are used in combination with some simple basic principals.

A Few Essential Questions To Ask Before You Start Searching For Life Assurance

Whilst access to online comparison services has simplified the shopping process for life assurance, there's a risk that they could cause some consumers to rely too heavily on their quotation results without first understanding what is the most appropriate cover for their needs.

As many life assurance plans are purchased with a term of ten years or more, a common arguement against price comparison sites is that price is not the only factor that should be assessed and compared as part of the buying process. This highlights the importance of policy features such as flexibility to adapt to changing priorities and how it affects the type, amount and duration of cover required.

Whether your circumstances are simple or more complicated, these questions can prove hard to answer on your own and you may find it easier to take advice from an experienced adviser.

Shop, Shop and Shop Some More

With the popularity of financial comparison websites and increased use of the internet, buying life assurance has now been transformed into a simple ten minute task that you can complete in your lunch break.

This is where some users trip up and make the mistake of restricting their quotations to just one website rather than comparing as much of the market as possible by using at least two. Limiting your shopping to just one quote comparison site also limits the range of your quotes and you could miss out on special deals not available anywhere else. Rather, be sure to use two or three of the major comparison services and come up with a shortlist of the most suitable policies.

This is where most people's research ends, but we're going to take it one step further and compare our comparisons against some discounted quotations.

How to Save Even More With Discounted Life Assurance

Having created a shortlist of premiums and policies quoted by the main price comparison sites, we're now going to see how much less you can pay by using specialist sites that apply a discount to their quotes. Whilst many of these discount quote sites don't compare as many policies and providers as the big price comparison sites, they often include the leading insurers and many smaller ones.

Above all, the main difference is that should any of these providers appear on your shortlist you're likely to save a further 5%-20%. It's quite possible to see quotes for exactly the same policies and providers with premiums discounted below those offered by the leading price comparison sites.

To find these brokers, just log onto your favourite search engine and search for discount life insurance.

Remember to Compare the Cover Too

Whilst we're all keen to pay as little as possible for our life assurance, it's also prudent to factor some additional features into your comparisons to ensure the long term suitability of your policy. Neglecting the importance of the following points could leave you with a policy that cannot adapt as your needs change over the cover term.

Can the policy adapt to changing needs? - because many life policies are taken out with a term of at least ten years, the cover should be flexible enough to change with your needs and circumstances once the policy has started. This re-inforces the need for a thorough comparison of cover features as well as price to avoid policies that may not be able to be altered in later years leaving you with no other choice than to take out extra cover or replace the existing one altogether when you may be years older and premium rates higher. Take a bit more time now and you will be rewarded with a policy that continues to give you the protection and peace of mind you want.
Can you add any cover after commencement? - the number and type of policy options can vary widely from company to company so it's important to be aware of what's available together with any terms and conditions before you buy.
How good is the customer service? - at the time of writing, there aren't any comparison sites that include customer service ratings in their quote results. A simple way to check this yourself is to do a search for the insurance company name and the word 'reviews' or 'customer reviews'. There are lots of websites dedicated to publishing reviews of companies and products written by genuine customers

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