Life Cover has been voted a number one priority for Britain, yet they are far more likely to cover their home contents and holidays abroad.
If you are unsure about what life insurance is right for you, then here are some tips to help guide you:
- Look in to the different options of life cover and choose the one that best suits you.
- Don’t lie. Make sure your answers are accurate and give all of your relevant personal information and medical history – 1 in 5 claims are currently rejected because they stretch the truth.
- Don’t forget the financial value of your unpaid work such as looking after children, cooking and cleaning because paying for these could cost thousands of pounds a year.
- Always review your life cover at life-changing events such as a changing your job, having children, or a change in marital status. Experts suggest you should review your life insurance every year to make sure your cover is relevant to your situation.
Protection specialist LifeSearch believe current UK economic problems should prompt homeowners to review their insurance.
Income protection could help homeowners protect their ability to make repayments on their mortgage and any other loans.
LifeSearch have come up with 10 tips to help you choose a policy. They firstly warn homeowners not to confuse income protection with mortgage payment protection insurance.
The protection specialist suggest those with mortgages to check the amount of cover offered, the benefits you are entitled to from the Government and your employer, as well ensuring premiums are guaranteed.
They also say you should consider alternatives, such as critical illness, this could be more suitable for your specific circumstances.
Policy adviser at LifeSearch, Matt Morris, said: ‘For most of us, the nightmare scenario must be discovering that not only have we been diagnosed with a long-term illness, but the realisation that income is going to dry up in a few weeks as well. Peace of mind is a few pounds a week spent on a good Income Protection policy.’
Zurich Financial Services said Thursday that it is to buy 50% of the general and life insurance companies of Spanish firm Caixa d’Estalvis de Sabadell for $360 million (227 million euros).
There is also an earn-out option of up to $150 million depending on the future performance of the two units.
In 2007, premiums written by the two Spanish companies reached $366 million.
Zurich’s chief executive for Global Life Insurance, Mario Greco says: ‘The transaction represents a high potential growth opportunity for us to expand in one of our key growth areas.’
There is an increasing number of British Soldiers wanting life insurance. Members of the Armed Forces who are currently serving in places such as Iraq are taking out more accident and life insurance, according to industry experts.
It is thought this is an attempt by servicemen and women, to increase Ministry of Defence (MOD) compensation pay-outs should anything happen to them whilst their on duty.
Keith Simpson, a conservative MP, said: ‘The question you have to ask is why do soldiers feel that what the Government offer as compensation is not enough. You also wonder what the premiums must be.’
An MOD report that was leaked last year revealed that soldiers could end up paying nearly £1,000 a year for life cover.
Life assurer Friends Provident, that is currently a takeover target, has entered a new phase of the long-running saga of its courtship by JC Flowers.
An offer of 150p a share (valuing the company at £3.5 billion) has been rejected by Friends Provident, with the backing of Scottish Widows, their biggest shareholder.
However, according to a Sunday Times report, Centaurus Capital which holds a 3% stake in Friends Provident, is pushing for negotiations to be re-opened, as they believe the rejected offer is close to an acceptable figure.
Centaurus’ action follows speculation that JC Flowers is willing to walk away from the proposed deal before the Takeover Panel deadline expires.
Indexation can now be added at a fixed rate between 2% and 5% for life cover or critical illness cover on guaranteed rates or linked to the retail price index.
Bright Grey has also increased the maximum term for life cover or critical illness cover from 30 to 40 years.
Kevin Stevens, Head of intermediary sales said: ‘Adding indexation offers excellent value for money by maintaining the true value of a client’s protection. It also means that cover can be increased every year without the need for medical information.’
He adds: ‘Indexation is an immensely valuable option in the adviser’s toolkit. Selecting the indexation option, at no extra cost, gives their clients the added piece of mind that should they be ill during the term of the plan, they still have the ability to increase their cover.’
The Sunday Times has reported that JC Flowers is working on a revised takeover bid for Friends Provident.
Last week, the Takeover Panel intervened after the US private equity group’s informal offer of £3.5 billion was rejected by Friends Provident.
JC Flowers has until the end of the Month to table a forma bid and has been in conversation with a number of groups who may be interested in buying parts of the business.
Following last year’s failure of its merger negotiations with Resolution, Friends has been undertaking a strategic review that has led to the auction of its Lombard division.
Friends Provident has been up for sale since January.
Recent research has found that 20 million adults in the UK are without life cover or income protection insurance. The reason is not because it is unaffordable, but is simply due to apathy.
More than a third (37%) of people who responded to the Norwich Union survey said they did not have life cover because they haven’t got round to it or they have not thought about it.
The results of this survey are not at all suprising. Insurers and advisers are well aware that people do not wake up in the morning with the desire to purchase income protection or life cover. It is only when they take out a mortgage or become aware of someone who has suffered an illness that they might think about life or critical illness insurance.
Even then the uptake is poor, according to research by AXA, the average family is under-insured by £176,776 and three quarters of UK adults are under-insured by an average of £96,927.
The Health Insurance & Protection magazine suggests that one place protection could be encouraged is within the workplace: ‘Using employers to actively target people’s protection needs seems like the next logical step’.
The protection specialists latest figures have shown that their Critical Illness payouts have risen by 20% between 2005 and 2007.
But equally the number of claims being declined has risen.
Zurich declined 12 per cent of critical illness claims in 2007, compared with 10 per cent in 2006.
The insurer found in 2007 3% of claims were declined due to non-disclosure and 9% were turned down due to the definition of an illness simply not being met.
Cancer has remained the most common condition accounting for 55% of critical illness claims paid in 2007.
Heart attacks were the cause of 13% of critical illness claims paid out and strokes were the third most common condition, accounting for 6%.
Alan Lakey, of IFA Highclere Financial Services, says: ‘The trouble with critical illness and income protection is a lot of clients, and advisers, do not understand the definitions. A client may have had an operation for a blocked artery but the definition of the policy may only cover the client for two blocked arteries.’
The well known charity known for its interest in social policy is recommending that a new type of insurance should be put in place to provide a safety net for people at risk of losing their homes.
They are calling for the formation of a Sustainable Home Ownership Partnership (SHOP) which could provide cover for total mortgage repayments for 10 months, if a homeowner is unable to work for any reason.
The scheme would be set up as a partnership between the Government, lenders and borrowers, with the aim to provide much cheaper insurance than is currently available.
The charity estimates that less than one in five homeowners has any form of income protection.
The scheme could also provide cover for around £3.40 per month for every £100 of mortgage repayment.
The Foundation is suggesting that borrowers pay 50% of the cost, with lenders and the Government both contributing 25%. The money could then be used to buy block insurance or build up reserves.
