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Life Insurance Frequently Asked Questions

Do I need Income Protection if I get Statutory Sick Pay (SSP)?

Statutory Sick Pay is paid to you by your employer if you are too ill to work, however the payment is very minimal at £95.85 a week and is paid to you for up to 28 weeks. Income protection can cover 70% of your lost income.

What happens if I out-live my Term Life Insurance policy?

A Term Life Insurance policy does not provide a cash sum if you are still alive at the end of the term. Premiums tend to be lower for such policies as the majority will out-live their policy. Term Life Insurance policies are generally taken out by people who do not want to leave any financial burden on their family such as mortgage payments.

What are the benefits of Income Protection?

Income Protection will cover up to 70% of your monthly income should you fall ill or suffer an injury, providing peace of mind that your bills will be covered and you won’t need to use your savings to get by. There are different levels of cover you can chose to suit your financial needs and budget. The sum paid to you is tax-free.

Who gets the payout from my Life Insurance policy if my children are young when I die?

Setting up a Life Insurance policy is designed to protect loved ones and writing the policy into trust goes a step further in achieving this goal. This enables you to select who would hold the money for your children until they reach a certain age should you die. This will often be a partner, sibling or close friend as they will have a legal responsibility to carry out the wishes of the person creating the trust.

I already have Health Insurance. Do I need Critical Illness?

Your Health Insurance policy will help cover the diagnosis, medication and treatment of your condition however, will not cover loss of income. Critical Illness will pay a tax-free lump sum to yourself directly which will help cover costs such as loans, mortgages and bills.

Can I add Critical illness to my Life Insurance?

Yes, should you suffer a serious illness Critical Illness cover will pay out a tax-free sum. This can be an add on to your Life Insurance policy or bought separately. Speak to one of our expert advisors to find out which policy would best suit your needs.

If I fall ill with Coronavirus, can I claim on my Critical Illness Cover?

Unfortunately, your Critical Illness Cover is not likely to pay out should you fall ill. Coronavirus is a viral infection so will not be listed on your policy as a critical illness. However, should you face heart failure for example whilst ill with Coronavirus – you should be able to make a claim.

What is the difference between Critical Illness and Income Protection?

Critical Illness Cover provides you with a tax-free lump sum should you be diagnosed with one of the critical illnesses listed on your policy. Critical illness does not cover your income specifically but will pay out a tax-free sum that will be used to cover your outgoings, usually covered by your income. When taking out cover, it is important to work out how much cover you and your family would need to still live comfortably should you become ill.