Will Life Assurance cover me if I become ill?

No, Life Assurance pays out in event of your death.

Why do you need Critical Illness Cover?

Critical illnesses are more common than people tend to believe and can affect anyone at any time. A number of critical illnesses are being diagnosed at a younger age. In fact in 2009 the average age of critical illness claimants was just 44 years old.


What is Terminal Illness Cover?

Policies can include something called 'Terminal Illness Cover' that will allow, at the insurer's discretion, an early payout of your policy if you are diagnosed with a terminal illness where you will die within 12 months.

This is offered as a goodwill gesture by the insurance companies to allow you the opportunity to settle your affairs and make your own arrangements before ou die.

It is important to understand that this is not the same as Critical Illness over and will only be offered for conditions where your doctor has told you that you will die within 12 months.

Can I get Life and Critical Illness Cover together?

Taking Life and Critical Illness Cover together can insure you are fully protected against the eventualities of death and of contracting a critical illness such as a heart attack or stroke. It can also serve to reduce Critical Illness premiums compared to taking Life Assurance and Critical Illness Cover separately.

Can I protect my policy against inflation?

Your policy can include an option called 'index linking' that allows it to increase on an annual basis to offset the effects of inflation and increases in the retail price index.

This is important because in time the real time value of your payout will decrease. In other words what you can buy for £100,000 today will not be the same in ten years time. Index-linking your Life Assurance policy will allow it to maintain that value.


How can I make sure my policy pays out quickly to the person I choose?

At the time of your death your insurance payout will not be the first thing your family will want to think about. However, it may be necessary to cover your funeral expenses or pay off your mortgage. As such, it is important that the process for ensuring your family is paid quickly is in place.

Normally your life insurance payout would be paid into your estate and left to the process of probate to decide how it should be divided up and used. Unfortunately probate can be a lengthy process (at times up to 6 months) especially if your will is contested.

One way to avoid the probate procedure for your life assurance is to have your policy written into a trust. Doing this allows you to nominate to whom the payout should be made, meaning that it is paid out to the intended recipient must more quickly.

As an added benefit, writing your Life Cover policy into a trust can also help to limit the effects of inheritance tax on your estate as this payout would no longer form part of it.

Having your policy written into a trust can normally be done at no extra charge as long as you include it when applying for the policy.