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The Life Insurance Market
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Life Cover is the most well known of all the financial protection products and the most frequently bought. Most people buy it to protect their debts (especially a mortgage) and their dependents if they die within a certain period of time. The policy will pay out a lump sum, or you can choose to have a regular income paid over a period of years instead of the lump sum if you prefer. This Life Cover option is known as Family Income Benefit.
Make sure the policy is written into trust by your insurance company for free. Trusts sound complicated but they are basically just a piece of paper, which legally changes the ownership of an asset - in this case the life policy. Just about every life insurance policy should be written in trust because it means you reduce your Inheritance Tax liability, the money is paid quickly to the person you have nominated to receive it and avoids any Inland Revenue delays, which on average last six months.
Remember when buying any of these products to always shop around. The most familiar brands, such as banks, mortgage lenders and most supermarkets, are rarely the most competitive. If in doubt speak to an independent adviser for free. They can search the whole of the market to find the best product and price for you.
No consumer is obliged to take the advice but, if you do, and the advice turns out to be inappropriate, you can take them to the Ombudsmen for recompense. Without advice, such as the service provided by many online companies and most supermarkets - except for Asda who offer advice to their customers - you have no way of complaining about your product.
If in doubt, ask them directly if they offer advice. If the answer if ‘no’ then be aware that if you buy from them you are taking sole responsibility for that purchase so you better be sure you know what you are doing.
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