Things to know

When taking out life cover you may be surprised to find out just how many things there are to know about life insurance! To help to prepare you, please find the Proadvice guide to useful life insurance facts.

What factors can affect my premium price?

Insurance companies work out how much your premium will cost by a number of factors such as your age, smoking status, occupation, medical history, hobbies and your lifestyle i.e. your alcohol intake. The amount of cover you require, (your sum assured) and the length of time you wish to be covered for, (the term of the plan).

Up until December 2012, your gender also had an impact on your premiums. This was until the European Union made it illegal to price people differently for their insurance, based on their gender. This ruling has spread to protection insurance, car insurance and pensions. The equalisation brought in by this ruling has changed the insurance market for ever.

Will my job affect my premiums?

When taking out protection insurance, the job you do can affect the plan you take out and the premium you will pay. Certain high risk occupations, such as working in a mine, working on an oil rig or being in the army or armed forces can increase the price you pay for your insurance. Your insurance provider will need to know details of what you do in your day to day role and each insurance company has different detailed requirements for each of the different job roles. It is imperative to get your insurance policy with the right insurance provider in relation to your job as it could be the difference between getting your policy accepted or declined. Proadvice advisers are trained in all aspects of insurance and all the requirements that the insurance companies will request to enable them to assess you. By speaking to a Proadvice adviser, we can ensure you are aware of what the outcome will be before you decide to go ahead. It is like knowing the winner of a race before you place your bet. By knowing how insurance companies will treat disclosures we can place you with the best insurer in the first instance.

I have a motorbike, will that make a difference?

If you ride a motorbike to work, this is not usually a concern to the insurance company yet some life insurance companies may consider riding a motorbike a dangerous activity and may increase your premium accordingly often dependent on how often you ride your motorbike and the size of the bikes engine.

Do I have to answer all the questions correctly?

When setting up a life insurance plan you need to answer all of the questions you are asked truthfully. Do not feel embarrassed to disclose past medical history or past drug use. The adviser running through the questions will be experienced and there is unlikely to be anything they have not heard before. It is important that you answer all of the questions you are asked by your adviser to the best of your knowledge, no matter how insignificant you feel it is. If you are unsure if a condition is relevant then please ensure that you mention it anyway and that will allow the insurance company to decide if they require more information on the condition. Failure to mention a previous condition could invalidate your policy or result in non-payment of a claim. 

Please be assured that all of the information you provide to us shall remain confidential and will only  be used by Proadvice and the insurer you opt to take your policy with. It is important to remember, that the reason you are taking out protection is to protect your loved ones, if you are not completely honest and the plan does not pay out then you have helped no one.

Do I need a medical to take out Life Cover?

In many cases no, you do not need a medical assessment to be able to take out life insurance. In the past, life insurance policies and medicals assessments went hand in hand and many people do not wish to take out a life insurance plan because they fear this is still the case. Many people avoid taking out an insurance policy as they simply do not have to time to complete a medical assessment yet this is often not necessary.   

In today’s insurance market many applications for insurance plans are accepted straight away. This is the case now, more than ever before. Many people are accepted for insurance after a telephone interview, where the insurance company will ask for the information from the client that they need to enable them to make an informed decision. Many conditions, for example, blood pressure, the client will usually know more about their situation and how controlled it is than their GP who sees them perhaps once a year. If the tele-interview cannot obtain all of the information that the insurer requires then they may have to write to your GP and gather information in that way. 

To be able to do this you will need to sign a medical consent form to allow the insurance company permission to access your medical records. All of this is completely free of charge for you. 

In rare cases medical assessments can still be required. This can usually be down to contributing factors such as the age of the client or a large sum assured has been requested. If you apply for a life insurance policy with a sum assured of a million pounds, the insurance company will want to know more information about you and your circumstances as that value of money could now be a huge risk to them. The medical assessment is arranged at your convenience and the insurance company aim to get it done as quickly as possible so the decision on whether you will be accepted can be made. Insurers often work late in the evenings and at weekends so that you do not have to take time out of work to complete a medical assessment, it can be arranged at a time convenient to you.

If you are over 50 years of age, there is a ‘whole of life’ plan where you can take out a life insurance policy with no medical questions asked. This can however prove to be quite costly so is usually a last resort policy for people with pre-existing medical conditions who do not wish to declare these or may have been declined elsewhere. 

I take part in what could be considered to be a dangerous hobby. Will this affect my plan?

If you take part in a hobby or sport that is deemed by the insurance company to be classed as dangerous, it may affect your insurance policy.

Here are just some examples of activities that the insurers often consider to be dangerous; aviation, climbing/mountaineering, diving, motorsport and parachuting.

Many of these sports you may partake in frequently and consider yourself safe however the insurance companies will view this differently. How the hobby or sport is viewed and dealt with by the insurer depends on a number of conditions such as;

  • How often you partake?
  • Any qualifications or exams you have taken?
  • Are you a member of any official council or body?
  • Maximum heights you go up to or dive down to?
  • What do you normally do?
  • To what extreme might you take your hobby?
  • Engine size (if motor bike racing etc)?
  • Do you partake in your hobby competitively?

Can I be refused Life Cover?

You can be refused life cover in extreme cases where your medical history or job may be considered too much of a risk to insure. In some cases some insurance companies will decline a case whereas other insurance companies will not. We at Proadvice are lucky enough to have access to numerous insurance companies and some of these insurance companies specialise in declined cases, for example, if you are over 50 years of age there is a specialist plan which will guarantee to accept anyone over the age of 50 for life cover.

If you believe you are likely to be declined from the onset, for example you are a 30 years old and have recently had a heart attack, Proadvice will be able to advise you of the outcome before you apply and this will prevent you from wasting your time.

In many cases rather than declining you, the insurance company may delay the cover and leave a time period between you suffering from a medical condition and them offering the insurance to you, this is called a postponement. To stop this happening Proadvice can also let you know if you have suffered with a medical condition, when the best time would be to apply for life cover.

What is Critical Illness Cover?

Critical illness insurance is a long term insurance policy designed to pay out a lump sum or income on the diagnosis of certain life threatening or debilitating (but not fatal) conditions, such as a heart attack, stroke, certain types/stages of cancer, multiple sclerosis and loss of limbs.

Once a successful claim has been paid by the insurer, it is at your discretion to use your money as you see fit. This could be to pay off your mortgage, cover your bills while you are off work, protect your family or pay to have private treatment. The money is yours and it is completely up to you what you decide to spend it on. In some cases the money could be used to change your home to suit your new circumstances if needed, such as adding a wheelchair ramp. The choice is down to you and your own personal circumstances. 

What type of Income Protection Plans are there?

There are two main types of income protection plans. There are long term income protection plans such as permanent health insurance and there are short term plans such as ASU, (Accident, Sickness and Unemployment) and PPI (Payment Protection Insurance) and MPPI (Mortgage Payment Protection).

The short term insurance plans are normally taken out to cover a debt or mortgage and there are usually no medical questions required to be asked. The short term plan is open to almost anyone in employment and as there are usually no medical questions, the plans often just have full blanket exclusion on all pre-existing medical conditions no matter how long ago they were. The insurance plans normally have a restricted pay-out period of one or two years and have to be reviewed every year due to the fact the plan is a general insurance plan the terms and conditions are subject to change. If you are to claim on your plan in year one and have a two year policy, the insurance company may decide to exclude the condition you have suffered, going forward.

This Payment Protection Insurance is optional. There are other providers of Payment Protection Insurance and other products designed to protect you against loss of income. For impartial information about insurance, please visit the website at www.moneymadeclear.org.uk.

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