Life Insurance Options – Getting the Most Out of Your Policy

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It is easy to think of a life insurance policy as a single product with no additional extras, but as insurance companies work harder to provide a full coverage package, the availability of options keeps expanding.

What is standard with life insurance?

There are four basic life insurance packages, and all of them seek to do a similar thing – to provide your family with financial security should you pass away. Depending on your financial situation and position in life, there is usually a best life insurance policy for you.

Whole of Life

The simplest form of life insurance (but often the most expensive), Whole of Life cover (or WoL) provides a lump sum upon your passing that is set at the time of taking out your policy. You make regular monthly payments to the insurer that continue for the whole of your life.

Whole of Life policies are good to cover funeral costs and smaller family legacies.

Over 50s

A variant policy on the WoL package, an Over 50s life insurance policy is available to those over fifty-years-old who do not wish to be subject to a medical check. Acceptance of an Over 50s policy is guaranteed.

An Over 50s policy is typically there to cover funeral expenses.

Level Term Assurance

A level term policy has a start and an end date, and provides a single lump sum payment should you die within its term. As it doesn’t provide cover beyond that point, the premiums are often cheaper, and you only have to pay while the policy is in effect.

LTA is a good policy for anyone who wishes to leave a substantial lump sum to their family upon their death.

Decreasing Term Assurance

Like a level term policy, decreasing term assurance (DTA) has an end date - at which time the policy expires. Until that time, the sum covered by the life insurance reduces, typically in line with a repayment mortgage amount.

DTA is a policy specifically designed to cover the immediate repayment of a mortgage should you die before it is fully paid. It is there to prevent your family from struggling with this significant monthly payment should you pass away, and it ensures that their home is secure.

Remember – it is possible to have more than one life insurance policy in order to cover multiple types of expense and it is not unusual to have two or three different life insurance covers in place during your life for this reason.

Option 1 – Critical Illness Cover

Critical Illness Cover (often shortened to CIC and pronounced ‘kick’) provides an additional level of insurance should you become critically ill and no longer able to provide financial support for yourself or your family through work.

It is one of the more favoured add-ons to an insurance policy and though it can be bought separately is often considerably cheaper when tied in to a level term or decreasing term assurance policy.

CIC policies are usually calculated as a multiple of your regular salary and can provide a lump sum upon your specified illness which gives you breathing space to recover without worrying about the extra stress that work would create, as well as providing financial support for private medical treatment.

Different insurance companies offer very different CIC packages and making sure you choose the right one can make a huge difference when deciding upon your final insurer.

With a specific list of illnesses covered, as well as different policies when it comes to repeated terms of illness and cover should your children become sick, navigating the complicated critical illness waters can be difficult.

At Quick Quote Protect, we have specialist insurance advisors with in-depth knowledge of the various CIC policies who can quickly help find the one that is right for you.

Option 2 – Income Protection

Simply shortened to IP, income protection provides a salary buffer should you find yourself otherwise unable to make your standard income. Unlike CIC, IP seeks to replace the regular payment of a salary rather than provide a lump sum and can be used in conjunction (or as a replacement to) any sick pay that is provided by your company or the government statutory sick pay.

Income protection is a particularly good life insurance addition for the self-employed, providing a level of security and peace of mind that those who work for themselves often believe they have to forgo in the name of entrepreneurship.

Available as part of your standard life insurance package or as its own separate insurance policy, income protection is available for anyone with a regular income. Speak to one of our experts to find out more.

Option 3 – health tracking

One of the biggest problems for life insurance companies when it comes to keeping the cost of premiums low is being able to accurately assess the level of risk each one of their clients provides.

In the past, when data collection regarding your health was difficult to ascertain, there was no way for them to offer discounts based on a regular health check. With the advances in health and life technologies such as the Apple Watch and Fitbit health band, it is possible to provide a regular and accurate update on your fitness state without any intrusion into other aspects of your life.

Health tracking policies are on the rise and offer a huge number of rewards. The most obvious of these is a discount on your premium that is tied to your personal health and exercise regime – the fitter and healthier you keep yourself, the less they ask of you to pay towards your life insurance. Working on a points system, these policies have fluctuating low premiums with goals that are realistic to keep and work not only on saving you money, but also on improving and extending your life!

Other bonuses such as free cinema tickets, discounts on travel and health club memberships are all added as part of the policy, providing a full lifestyle package that can benefit you greatly.

Option 4 – index linking

Taking out a policy for £300,000 might feel like a substantial amount of money today, but will that sum feel as impressive in 20 years’ time? It’s unlikely, as inflation can make what seems like a small fortune today feel like little more than pocket change in a few decades.

By opting to index link your policy, you avoid any drop in value and make sure the end payout is identical in real world worth when it is needed as it was when your policy began.

Index linking does increase your premiums year-on-year as they keep up with the rate of inflation also, but these minor bumps become as nothing compared to the huge advantage of making your policy remain as relevant in the future as it is today.

How Quick Quote Protect can help!

At Quick Quote Protect, we have the very best life insurance advisors in the country today working for us.

With an extensive training process and wide knowledge on all the top providers of life insurance and associated products in the UK, our specialists are here to get you the best policy possible.

Give us a call today and speak to one of the team regarding additional extras to a standard life insurance policy and build an overall personal insurance package that is right for you.