Compare Life Insurance
Life insurance can be a sensitive topic. Planning for an event such as a partner’s death has a slightly morbid feel about it and you do not really want to consider the thought that either you or your partner will die unless that inevitable event is somewhere in the very distant future.
There are various ways that you can buy life insurance in the UK. A friend may recommend a company that he or she has used, you might contact an insurance company or broker direct or you can use a comparison website. It does pay, though, to shop around for the best life insurance deals UK companies have on offer, because no comparison website can possibly cover them all. What is more, many brokers and larger insurance companies tend not to appear on comparison websites. Using Insurance Deals UK is a fast and easy way to compare the latest life insurance deals.
If you are buying an insurance policy from a comparison website, check that all your personal information is written on the policy correctly. Some comparison websites ask you various questions, before assuming other answers about you themselves. Read the information carefully and amend any personal information that is incorrect.
Always make sure that you understand the terms of the policy, the payments, the flexibility, any excesses you have to pay and the return.
If you approach an insurance provider or broker directly they will provide you with details of all the services they offer. For example, they will explain what company or companies policies they offer, the price of the service and whether they are offering you “advice” or “information” about the policy. “Advice” means that the broker recommends a specific policy suitable for your circumstances; “information” is explaining the policies they offer and the price of the service.
The FSA is responsible for the regulation of insurance companies and brokers selling life insurance. Make sure that when you compare life insurance deals the insurance company or broker is registered with the FSA, otherwise you will not have access to the complaints and compensation procedure if things go wrong.
There are two forms of life insurance deals in the UK, “term” and “investment.”
Term insurance (often referred to as protection only insurance), is the cheaper of the two types of life insurance and pays out a guaranteed lump sum if you die before a specified date. This can be any number of specified dates, for example the end date of your mortgage or the date a child finishes university and becomes self-sufficient. If however you survive until after the specified date or you cancel the policy before its due date, it does not pay out any amount of money.
To increase your protection, you can add critical illness to this type of policy. This means that if you were to be diagnosed with a degenerative illness, you would be entitled to a lump sum.
The lump sum paid out by investment insurance is variable and is dependent on how well the fund has performed in the market. Some policies pay out the lump sum on a specified date (maturity) or on death, while others only pay out on death. Policies that pay out the lump sum on a specified date or on death include those with unit-linked bonds, with-profit bonds, income and growth bonds, maximum investment plans, endowment policies and other life insurance that builds up a value that you can convert. Whole of life insurance, however, only pays out in the event of death.
As you can see, there are distinct differences between these two forms of insurance, so it is important that you compare the life insurance deals that suit your lifestyle and needs, the flexibility of the policy, the risk and the return on the investment.
Investment insurance is more expensive than term insurance and is more complex. Be completely sure that you are confident with the wording on your policy and compare life insurance deals before signing-up for anything.
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