Life Insurance, also known as life assurance, is an insurance policy that pays out a sum of money in the event of a death during the term of the policy. There are many different types of life insurance policies to be available depending on your needs and some of the most popular life insurance types are:

Level term life insurance provides a fixed sum over the term of the policy and in the event of a claim the payout will be the amount insured.

Decreasing Term Life Insurance sometimes called ‘Mortgage Term Insurance’ is designed to protect a ‘repayment’ (capital/interest) mortgage as the sum assured reduces in line with your mortgage.

Contact Insurance offer online life insurance quotes from the leading insurance providers to quote and compare life insurance plans. 

For more information or for an online life insurance quote / life assurance quote please click here.

Purchasing life insurance is an important decision and it is vital that you choose the right life insurance policy for your specific needs.

Sure, there are a number of websites that have an online life insurance quote systems that will save you time and money shopping around for the best price. But the vast majority of these are ‘execution only’ in that they purely show you life insurance plans and prices and do not give any advice to help you in your decision to ensure you are getting the life insurance cover you need.

Hence when buying life insurance it is worth getting professional advice, especially if you have complicated circumstances or unsure what cover you need e.g. what amount of cover do you need, what excess should you have, do you need critical illness cover etc.

Contact Insurance is an ‘advisory’ broker and with years of experience in the financial services industry we aim to give clients a personal service, informative, helpful advice and a ‘best fit’ life insurance policy, suited to their circumstances and needs.

The promises we make to our clients:

• We will never charge you any fees
• You will always talk to a consultant here in the UK - never abroad
• We will always search for and give you the best quote

Contact Insurance is authorised and regulated by the Financial Services Authority (FSA).  The FSA was setup to make sure companies offering financial services treat clients fairly. We have processes in place and give concise, accurate and honest information. If you’re interested in finding out more visit their site at www.fsa.gov.uk and look up our registered number: 468731.

Find out what a difference using Contact Insurance can make by calling us now on 0800 328 5773 or visit us at www.contactinsurance.co.uk

Legal and General has introduced a multi insurance product discount available through Contact Insurance and selected insurance brokers. A discount applies to people buying more than one insurance product (such as life insurance with income protection insurance) or two individuals applying for separate insurance products on the same application form - excluding joint life insurance policies.

For each additional product taken, L & G offer a discount of £1.50 from the monthly premium, divided across all products applied for.

One additional product would mean a discount of £0.75 from both plans, while two additional policies would attract a total discount of £3, to be split three ways. The discount applies for the term of a policy and is also open when ‘the insured’ who’ve been rated/loaded by L&G (those that have to pay an increased premium because of medical history or lifestyle concerns).

Examples of how you could save include an individual taking out a life policy to cover a mortgage and then adding critical illness cover, or income protection to the policy.

Protection Product Technical Director at Legal & General, Bonnie Burns, said:

We recognise that multiple products on the same application simplify things for advisers and clients, and also add cost savings due to the more straightforward underwriting.

We are therefore increasing the incentive for advisers to apply for multiple products thereby helping clients to get more for their money.

Legal and General is one of the largest insurers in the UK offering some of the most competitive prices on Life and Critical Illness cover. Compare rates with other providers using our online life insurance comparison service. If you have a need for more than one insurance product, it’s worth getting in touch with us to see how we could help you save money.

It is expected that during this financial year HM Revenue and Customs are likely to collect £2.3bn in inheritance tax (IHT), the product of taxing people’s assets and cash when they die.

A good way to avoid paying any prospective IHT bill is to take out a Life Insurance policy. A life insurance policy can be taken out on the life of the individual concerned or a joint life insurance policy with their partner.

On the event of the insured person’s death, a payout from the policy meets the tax bill, rather than the funds being drained from the inherited estate to do so.

Inheritance tax is currently payable on the amount above £325,000 or, if the last person in a married couple or civil partnership dies, their joint allowance of £650,000. Anything above these amounts will be taxed at 40%, which could leave a hefty bill for any individual.

What are the benefits?

It is important to highlight that any proceeds from an insurance policy would normally form part of the deceased’s estate as they are classed as an asset of that person. However, this would void any reasoning for taking out a Life insurance policy, as this would only increase the value of the estate and would lead to IHT being payable.
This can easily be avoided by making sure that the policy is written in trust for the deceased’s beneficiaries. A beneficiary is chosen by the person or people that are taking out the policy, who they want to receive any of the assets they are giving away.

The money is then paid to the Trust for the benefit of the beneficiaries. This enables a cash lump sum to be made available outside of the deceased’s estate to pay any IHT, leaving the value of the estate intact to pass on to any beneficiaries.

Where can I buy Life Insurance?

Life insurance is available from a variety of places, but is usually purchased from an Independent Financial Advisor, directly from an insurance company or through the internet.

Regardless of where you purchase a Life insurance policy from it is important that you understand the policy and that it provides the right level of cover at a suitable cost.

Many employers are starting to offer life cover to their employees and provided this not paid to your estate on death it will escape IHT.

What policies are available?

The most common and most simple type of Life insurance is called term assurance. A term policy is essentially a temporary policy, which will only pay out if the person insured dies within the term of the policy. This type of policy is usually chosen by someone to cover a mortgage or secured loan and can be paid over period of 20 years. Once the term is completed by the individual, the policy ceases with no cash in value.

Another type of policy called ‘whole of life’ is also commonly taken as life cover, which, as the name suggests, lasts for the whole of the insured’s life. As there is a guaranteed payout in the event of death, premiums for ‘whole of life’ policies tend to be more expensive.

Where can I get advice?

When applying for insurance all premiums are based on age, sex and health (including smoking habits) of the insured. Premiums will vary from person to person, with older people likely to pay higher premiums as insurance providers will consider the risk too great, but for younger people taking out cover should be reasonably cheap.

If you have any doubt as to which policy you should take out, you should seek out professional advice. This can be from an IFA, or even a solicitor or accountant if general advice is sought about wills and any IHT liabilities.

An example of how Life Insurance works

Roger dies owning a house valued at £500,000.

He also has investments totalling £100,000 and an outstanding mortgage of £50,000.
The value of the estate is calculated to be the total assets (£600,000) less the total of the liabilities (£50,000) giving a net estate of£550,000.

The net estate exceeds the IHT limit by £225,000 and therefore there is an IHT tax bill of £90,000.

If Roger had been married and made a will leaving all his estate to his wife there would not be any IHT to pay at the time of his death as transfers between spouses and civil partners are exempt from IHT.

However, at the time of his widow’s death the value of their joint estate would be charged IHT where it exceeded their joint IHT allowances (currently £650,000).

Roger’s executors would have to settle the IHT bill due with the Revenue thereby decreasing the inheritance due to the tax beneficiaries.

But if a sufficiently large insurance policy, written in trust, has been taken out, then that will cover the IHT tax bill instead.

Critical illness insurance is a long term insurance plan, designed to ease any financial pressure by paying out a tax-free lump sum if you are diagnosed with a serious illness or become totally disabled. For the insurance policy to pay, you must survive for at least one month after becoming critically ill.

The range of diseases/illnesses has increased to more than 30, but insurance policies may differ between providers. All insurance policies should cover seven core conditions, which are cancer, coronary artery bypass, heart attack, kidney failure, major organ transplant, multiple sclerosis and stroke. Depending on the insurance provider you choose, a policy may also pay out if you become permanently disabled as a result of injury or illness.

Due to medical advances over the years, insurance providers have introduced more restrictive rules for heart attacks. For a claim to be successful that has to be evidence of chest pains or changes in the electrocardiogram (ECG). It is important to note that some cardiac conditions such as Angina are not covered.

Insurance providers will provide you with a policy summary, which will set out a list of illnesses covered. However this is only a guide, with the Policy document setting out the criteria that must be met before your provider would pay you your claim.

Am I eligible for Critical Illness Insurance?

• Normally most providers will allow you to take out cover if you are between the ages of 17 to 70. A Critical Illness policy can be taken out that coincides with the length of your mortgage or you for as long as you choose. If you decide to take out critical illness cover it is important to note that most providers may impose a waiting period of 3 months before you may make a claim.

• If you decide to apply for cover you will be asked if you or your family have suffered in the past. If you or members have suffered from illness in the past, your premiums that you will pay may be higher as you will be rated. If you need to make a claim on your policy it is essential that you are honest about your family history, failure to do so may result in your claim being rejected.

It is important that you understand what the policy covers, and when it will pay out and when it may not.

What to look out for

Looking for the right cover can be a tricky process, with the wide variety of policies available on the market. It is advisable not to go for the cheapest option in the first instance, as these policies will probably offer limited cover.

Below is our 4-point guide for finding the right cover?

1) Make sure you read the small print, so you aware of the agreement you are entering into and making sure you know what is covered and what may not.

2) Check with your provider if your premiums will be guaranteed (fixed), or increased with the insurance company reviewing your policy every few years.

3) Make sure you are given a Key Facts document, which will provide you with the illnesses that are covered and the ones that are not

4) Many providers are now starting to cover children on their standard policies.

If you require more information and help with choosing the right Critical Illness plan, one of our trained advisers will be happy to help – Call 0800 328 5773.

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