Summary
The choice tendered by protection top insurance companies to generate protective packages for the customer, which considerably lowered the prices found in protection insurance options. The market has now moved ahead and a flood of new protection policies have been launched which have acquired the approvalof many intermediaries.
Scottish Provident was the 1st to introduce a winning blueprint when it re-launched it’s Self Assurance options. They were soon followed by Friends Provient, Legal and General, Liverpool Victoria Life, Scottish Equitable Protect, Skandia Life and others are expected to follow their lead soon.
Three fundamental points are to be found in nearly all protection options. Critical illness cover names a number of stated critical illnesses for which the insurer would pay out a lump sum. The the lower price option, term insurance, pays out a lump sum if you die within a limited period and nothing thereafter. The last one is income protection, which gives you a regular income if illness or long term disability thwarts you from working. The options may offer you redundancy protection, which is generally limited to 12 or 24 months and might also be limited to the payment of a mortgage. The principle appeal is the flexibility of the products. For instance various levels of insurance can be structured for individual modules, so so if you need to make a claim on one part the other parts will still stay in force. No further health information will be necessary prior to major living events, like having a baby, getting married or moving house. These further benefits are known as ‘Guaranteed Insurability Options’.
Different elements of insurance may be supplemented following the completion of a short questionnaire and you will still get benefit from the usual insurance policy discounts.
An example of the benefits obtained from a protection menu is shown by a a young man and his wife who selected Standard Life’s Protection Choices menu for mortgage protection. This couple are paying a jointly held policy of £33 a month for separate life policies and critical illnesses, which have been done on a combined life basis. Initially they have insurance cover of £110,750 which reduces as their 22 year homeowner loan is paid off. Life insurance cover will be paid out if 1 of them passes away and the policy is ended, but the one surviving will still benefit from critical illness cover Life assurance will be upheld for both partner seven if one becomes ill and the insurance will settle on whoever dies first.
If the husband and wife had purchased a standard joint life policy with Co-op Insurance they will only get a pay out on their 1st claim. Whereas with their Protection Choices policy they are given two possible pay outs costing only £8 more. Although workers are sometimes offered income protection at work they may also wish to insure their mortgage in the same way. Plus they may want to take out additional critical illnesscover and life insurance not combined with their mortgage. Aviva’s protection options make it possible for them to do this in a cost effective and straightforward way. The new options based insurance products permit you to save money although you can research around for individual insurance products and only save a couple of pence.