I am considering buying some life insurance what do I need to know ?

In the past life insurance was something that you sorted through your

broker when he or she came to visit at home and they sat and

discussed it with you for a couple of hours and answered any

questions you had. As with everything else and as socitey has

changed so has how we now buy our life insurance. With the advent of

the Internet and with technology transforming the insurance industry

the days of the visting broker are numbered. Car insurance led the

way with instant online quotes and applications on the Internet,

however this is not as hard to understand as life insurance as apart

from what make is it and whats it say on the numberplate what else

do you need to know ?

With life insurance there are a number of key factors you need to

understand before you make the purchase.

Level or Decreasing ?

Where level life insurance is selected the amount of cover will stay the

same throughout the length of the insurance. Your payments will stay

the same except if you change cover. This is also known as term life

insurance or family protection and is ideal to cover interest only

mortgages or leave income for a family should you be no longer with

us.

Where decreasing life insurance is selected the amount of cover will

reduce each year on the anniversary of the start date of your life

insurance. The amount of insurance is calculated to match the

maximum outstanding on a loan in the next 12 months. This is the

basis for the decreasing life insurance regardless of the purpose of

cover for example if not taken out to cover a loan or mortgage. The

payments will remain the same throughout the length of the cover.

Decreasing is often cheaper than level life insurance as the sum

assured is coming down over the term of the policy.

Can the payments change ?

This is purely dependant on the type of basis you choose, this can

either be guaranteed or reviewable ?

Guranteed - If you choose to guarantee your payments they will not

change during the term of the cover unless you make any changes.

Reviewable - If you choose to make your payments reviewable they

may change during the length of the cover, these are offered to make

the payment more affordable at the start of the contract, more often

than not the review occurs after 5 years and then every 5 years during

the term of the contract. The review of the life insurance could

recommend the policy premium is reduced - very unlikely, stay the

same - likely, go up in premium - likely. The review is not based on

your medical history or because you are older but normally on

industry claims experiance.

It says i have terminal illness included with my life insurance whats

this ?

Terminal illness is normally included as standard to any good life

inusrance contract, this pays the guaranteed sum immediately rather

than upon death if you are diagnosed as being termninally ill with a

life expectancy of less than 12 months. This does not apply during

the last 18 months of the period of cover. Please dont confuse this

with critical illness cover as this is far more expensive option and

wont be included standard.

Should I place my life insurance policy in trust ?

In a word yes, this will enable in the event of a claim the sum assured

of the life insurance policy to go directly to the person or people you

decide. This also avoids the possibility of your estate having to pay

inheriatance tax on the proceeds of the policy. This is normally

offered as part of the service with any reputable life insurance broker.