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February 07, 2018

Do You Need Life Insurance?

Do You Need Life Insurance?

The decision to get life insurance is an important one. We have compiled a list with Zurich Insurance UK of common questions to help inform you about what life insurance involves and how it could benefit you.

At what age should I start thinking about getting life insurance?

It’s never too early to think about life insurance once you’ve started your working life and have outgoings such as rent, mortgage or even loans or credit card debt. However, there are different products that are likely to suit some more than others. Income protection insurance, for example, helps replace income for a period of time if you become ill, or are involved in an accident and find yourself unable to work. Critical illness insurance pays out a lump sum on diagnosis of certain conditions, which will help take any financial strains out of what might be a difficult time.  

Does everyone get life insurance?

Anybody can apply and benefit from life insurance providing they are in reasonable health and fill out applications correctly. Even people with a family history of various conditions can benefit from life insurance, though extra information may be needed when they apply to ensure the right cover is provided at the right price. 

What happens if I die and have life insurance?

Life insurance pays out a lump sum on death to a customer’s chosen beneficiaries. The level of the lump sum paid out will depend on what you chose when you took out your plan. You can choose for it to increase each year to protect against the effects of inflation, or you might want it to reduce each year in line with your mortgage.  

When will the plan not pay out?

The vast majority of life claims are paid out. Very occasionally, some claims are not and should not be paid. For example, where a customer may have withheld important information about their medical history—such as a history of heavy smoking or alcohol misuse. 

Can I get a joint plan with my partner?

Yes, joint policies are available. They pay out when the first partner dies. 

How long does life insurance last?

Life insurance lasts as long as customers choose. You may choose it to cover the liability of a mortgage over 20 years for example, or for 10 years if you have 10 years remaining on your mortgage. Or you can have life cover that pays out on death whenever that happens and however old you are.

What is the difference between whole of life cover and term cover?

Whole of life cover is a policy that provides cover for life, whereas term cover is taken out to cover a certain period.  

What factors affect the amount of the insurance payment and end pay out?

People’s policies will vary in price depending on how long they want cover for, the amount they want to cover themselves for (the sum assured) and things like age and health. Somebody younger and in good health will pay less for cover than an older person with medical issues.

What happens if I suddenly lose the ability to do my job or become ill?

If people are unable to work through illness or injury, cover is available to support them. Income protection, for example, pays a monthly benefit to replace part or all of the lost income, while a critical illness policy will pay out a lump sum that can help ease any financial pressures. 

Can I ask for the plan to pay out to someone other than my immediate family?

Yes, policies will pay out to non-family members if that’s what customers want. It is possible (and easy) to set up a 'trust' which ensures the money can be paid immediately to whoever you want, free of inheritance tax. If no trust is established, the money on death will be paid to your estate and distributed according to your will, assuming you've made one, or in line with the laws of intestacy if not.

Taking out a life insurance plan with Zurich means that you and those closest to you are protected with quality cover. In 2016, Zurich paid out 98 percent of all their death claims, and with all their plans you and your immediate family will be given the option of free, professional counselling if you need it. 

Find out more information today by visiting Zurich.co.uk

Zurich Assurance Ltd. Registered in England and Wales under company number 02456671. Registered Office: The Grange, Bishops Cleeve, Cheltenham, GL52 8XX.