Protection for Life: Life Cover
Frequently asked questions for Life Cover
Click on the links below to find the answers to each question.
Do I need life insurance?
There are several reasons why life insurance may be important to you. If you die or are diagnosed with a terminal illness, it can help:
- provide for your partner, family or dependants
- pay off your mortgage or other outstanding loans
How much cover might I need?
It depends on your personal circumstances. Some things you may want to consider are:
- how much your family would need to support themselves without your salary
- the size of your mortgage and how long it’s got to run
- any other outstanding loans or debts you have
- the amount you want to pay each month.
See cover options for further information.
Can I include Critical Illness cover?
Yes, you can take out life insurance with Critical Illness cover. Critical Illness with Life Cover can provide a cash sum on death or on diagnosis of a terminal illness or specified critical illness within the policy term.
Can I take Life Cover out with my partner?
You can choose to apply for benefits to cover your own life – this is a single person plan.
Or, you can apply for benefits with your partner to cover your individual protection needs in one plan with joint ownership – this is a two person plan.
With a two person plan, each of you applies for individual benefits under one Protection for Life plan. There is one direct debit, one policy fee and the flexibility to apply to change your plan or your benefits as your needs change. You can also choose to jointly own each other’s policies.
If you take out a two person plan we’ll also ask you to give your consent to share all information relating to your plan, including details of each other’s policies.
Can I change the level of cover?
Yes. Once your policy is set up you have the flexibility to apply to change the amount of cover at any time, increase or reduce your term, or add on benefits when it suits you. Some changes will lead to us carrying out further underwriting.
Can I choose who gets the payout if I die?
Yes, you can nominate who you’d like as a beneficiary. You may wish to put your policy in trust for the benefit of anyone you specify.
Can I choose when to start my policy?
Yes. When you apply you can:
- start it as soon as possible
- choose ‘Not known yet’ (if you are unsure when you would like your policy to start)
- give a specific date
If you’ve applied for more than one benefit, you can choose different start dates for each one.
Do I get any money back if the policy reaches the end of its term and I haven’t made a claim?
No. The policy has no cash-in value at any time. Also, if you don’t pay your premiums on time your cover will stop, your benefit will end and you’ll get nothing back.
What’s the difference between Lifetime Cover and Life Cover?
Life Cover provides cover for a specific term that you choose at the start of the policy. Lifetime Cover lasts for the whole of your life.
Why should you include additional trustees if you're putting your policy in a trust?
If no additional trustees are appointed this can cause complications if a claim is made as there may be no surviving trustee to ensure the terms of the trust are carried out. This would cause delays in payments being made to the beneficiaries who will likely need the policy proceeds as soon as possible, to provide them with the financial stability that the protection policy was designed to give.
Where there are no surviving trustees to administer the trust this will mean:
- If the last surviving trustee left a Will, probate/confirmation would need to be obtained by the executor(s) who can then undertake the role of trustee or alternatively appoint new trustees to administer the trust. The policy proceeds can then be released to the executor/trustees who in turn can distribute funds to any beneficiaries.
- If there's no Will, a Grant of Representation would need to be obtained and legal personal representatives would need to be appointed who can then undertake the role of trustee or alternatively appoint new trustees to administer the trust. This would be an even longer process and not a good experience for the people affected, which will likely be dependents who will need access to funds in the short term.
Also, if your trust is set up to allow for trust proceeds to be paid to a wide range of beneficiaries at the discretion of the trustee(s) and according to circumstances, at least two trustees would normally be required to allow the policy proceeds to be distributed to the intended beneficiaries. There would be a delay in payment until the trust period expires or a new trustee is appointed.
What would happen if the sole trustee was incapable of acting?
Having no additional trustees can also cause problems if a sole trustee becomes incapable of acting during his or her lifetime (by reason of a mental incapacity). It'll then become impossible to administer the trust without the intervention of the court.
What do I need to do to appoint additional trustees to my protection policy?
It’s easy to appoint additional trustees, you just need to print off and send us the completed Deed of Appointment of additional trustees form to allow the additional trustees to be added and ensure that there are no unnecessary complications if a claim occurs. Remember that your trustee needs to sign the form and it includes details of their duties and responsibilities.
There are notes in the left hand margin explaining what's required to help you complete the form. If you've any queries about how to complete this deed, please contact your Financial Adviser or your legal adviser.
Have we answered all your questions?
We hope you have found this summary of frequently asked questions helpful. If you have any further questions please contact us.