Online Life Insurance -ABC

If you have a family history of ill-health or if you dink heavilyor smoke heavily you might be under the impression that critical illness cover or life insurance cover may be very very costly. A director at Norwich Union, Mr L, says this isn’t alwaysthe case, “Some of those eating ‘too much’,excessive drinking or heavy smoking will probably step back away from cover for fear of being unfairly penalised for their awfulhabits. However, they will more than likely find that these importantforms of financial protection cost even less than they thought.”

Mr T a specialist re-insurer, says only thirty % of the working community have life insurance cover and only 11  per cent have critical illness insurance, even though it is generally deemed that if you are working and/or have a mortgage and dependants, this  assurance is paramount. Many, many people are taking unnecessary risks.

If a person were to die suddenly their life insurance policy will pay out on death and with any luck will be enough to repay the outstanding mortgage, and/or provide any loved ones with financial security.  In the case of CICit administers a dividend and helps at this time.  Even though medication is advancing all the time and people are recovering from life-threatening illness, they are often unable to work temporarily or are forced to just to give up; this is when a tax-free cash lump sum can create the financial security desired.

If a person does drink or smoke premiums will be higher but they do vary a lot between one insurer and another. And  they also vary between critical illness cover and life insurance. Legal and General doesn’t raise premiums until an intervidual is consuming the equivalent of 3.5 to 5 pts daily.  For a non-smoking 33yr old, consuming less than 9 units per day or 45 units a week, for 120,000 pounds of life insurance cover, the basic rate is 17.90 pounds per month.  If you consume between 45 and 65 units weekly it increases to 26 pounds per month.

In comparison, it will cost a 25 yr old non-smoker 18.90 pounds per month for 110,00 pounds of critical illness cover . For a smoker this goes up to 32.60 pounds monthly, but the premium only increases again if you smoke more than two packets a day.

**A family history of conditions such high blood pressure or asthma does not mean that premiums will be certainly higher.  A 35 yr old teacher, Mr O, comes from a family that has many members suffering from asthma although his sister and his parents do not. A few months ago, he and his wife took out life insurance and CIC with Axa from Legal and General, providing them with a cover of 145,000 pounds.  Their monthly insurance premium costs 39.50 pounds and  Mr X was quite surprised that his families medical history didn’t alter what they pay.

A managing director of Money Supermarket,  Mr X, says if you can’t afford to do both, it is sensible to cover your mortgage with life insurance and then take as much CIC as is affordable.

 ”Any one who can afford it should have CIC,” he says. “If you’ve got children you should have life insurance and critical illness cover. The only people who may not require critical illness are those with excellent, not just average, employee benefits.”