What is Life Insurance?
Life insurance provides financial protection to your loved ones in the form of a lump sum payment, should you pass away during the term of the insurance policy.
It’s a fact of life that we won’t be around forever and the thought of leaving behind our families isn’t a nice one.
One of the things we often neglect to think about is that our family’s won’t just have to deal with the grief of losing a loved one, but they will also have to deal with their financial commitments, as well as many other expenses such as funeral costs etc.
The life insurance assurance payment can be used however your loved ones deem fit, this could be funeral costs, clearing mortgage, existing debts or setting up a savings account for your children’s future, to name a few things.
How much Life Insurance do I need?
Before we start working out how much cover you need, what the average is, or what your friends tell you that you should have- you need to sit down and work out what is important to you.
At Hooray Health & Protection, we talk with our customers to uncover what things are really important to them in life that are needed to be covered.
Usually this will cover (but is not limited to) the following:
- Family and/or dependants
- Current savings
- Existing debt (sole and/or joint)
- Funeral plans
- Existing insurance
It is worth reviewing this with a protection expert as life insurance may not be the product, or only product available to you.
We regularly hear of single people, no children or dependants or any savings in the bank, but because they have a mortgage they have been ‘advised’ by their mortgage broker to take out life insurance with no exploratory fact find being carried out initially.
Is this really the right product for those customers? As there are no dependants or partner to worry about, shouldn’t we consider income protection instead?
It’s these questions that you need to consider when working out how much life insurance assurance is required, and really think about what’s important in your life when considering which product is best suited to your individual needs.
How much does Life Insurance cost?
Life Insurance is one of the most established insurance products in the world, with modern life insurance tracing back to London in the 1700’s.
With an established product like this, a quick investigatory google search will show us many options, with prices starting from as little as £6, as per the below:
It would be great if everyone paid as little as £6 a month, but before we rush into budgeting for this amount, some of the things we need to consider are:
What percentage of claims do the life insurance companies offering these deals pay?
At Hooray Health & Protection, we will only recommend life assurance companies that have over a 90% pay out rating, as a minimum.
Fixed or Review-able Premium
Is the premium you’re paying for the insurance policy fixed, or can this be reviewed by the life insurer at set periods?
If that’s the case, and your circumstances change, on a review-able policy your premiums might go through the roof.
Many life assurance companies will offer gift vouchers or cashback for placing a scheme with them, but where is this money coming from?
At the end of the day, it will be added back into your premiums to recoup their fund. That’s why it we must consider whether the small initial premium advertised is ever going to be the one you really get.
Typically this would be applicable only to very low-risk individuals, such as a non-smoking, 18 year old and physically fit individual, as set my strict industry medical standards.
Will insurers pay my claim?
Life insurance still gets a bad reputation, largely due to historic mis-selling practices and a lot of negative press off the back of payment protection insurance scandals.
Below, we have the Association of British Insurers life insurance claim statistics for the life insurance (term and decreasing) product, as well as ‘whole of life’ insurance:
The above figures are based on individual and group schemes combined, but at 98% and 99%, we feel that the life insurance industry is proving to their clients they are serious about helping customers in their time of need, by paying out valid claims as they should.
Why use Hooray Health and Protection for Life Insurance?
At Hooray Health & Protection, insurance is what we’re all about, and we have a wealth of experience in dealing with life insurance policies of all shapes and sizes.
We understand that Clients have the option to go direct to insurers, but we always point out that we do not charge a fee for individual life policies (insurers pay us commission instead).
We have substantial experience and supreme bargaining power to ensure you receive the best price. We truly are here to support you if you ever need to claim.
All quotes and advice are fee-free, so give us a call to discuss your options today!