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The Top Additional Life Insurance Options
Many of the best Life Insurance policies will have additional benefits above and beyond offering a payout on the policyholder’s death. These may be included as standard or offered for an additional premium.
Including Critical Illness Cover
Most Life Insurance policies will offer Critical Illness Insurance as an add-on. If you choose this cover, it will increase the price of your premium; however, this is likely to be a better choice in terms of price than taking out Life Insurance plus a separate critical illness cover (CIC) policy.
Terminal Illness Cover
Terminal illness cover is usually a standard feature of Life Insurance policies, allowing for a payout to be made before the policyholder’s death if they’re diagnosed with a terminal condition (having less than 12 months to live).
Type Of Premiums
Generally, guaranteed Life Insurance premiums – where the monthly sum you pay doesn’t change through the life of the policy – are seen as ‘better’ than reviewable Life Insurance premiums.
This is because the insurer can’t change the amount they charge you
Reviewable premiums may be cheaper at the outset of the policy, but could prove significantly more expensive in the longer term as insurers are free to raise premiums over time.
This may happen if, for example, the provider experiences higher claim levels than it had anticipated, or if a major change in interest rates increases its cost base.
Waiver of Premium
This option can mean that, if you find yourself in unfortunate circumstances, your Life Insurance policy remains in place without you having to continue to make premium payments; this may be, for example, if you can’t work because you’ve become seriously ill.
Flexible Lifestyle Options
Policies can come with an enormous range of flexible options that can seem great to cope with changing, unpredictable circumstances. But you also need to remember that the more flexibility you build into a product, the more you’re likely to pay in premiums.
Some common options include:
- Guaranteed insurability
Allows you to increase your level of cover without a further medical assessment
- Benefit indexation
The level of your potential payout will increase in line with inflation
- Renewable Term Life Insurance
Gives the option to renew at the end of the policy without a further medical assessment
- Convertible Term Life Insurance
Can be turned into a whole of life policy without a further medical assessment
Best Support Services
Look beyond the core cover. All policies at their core pay out if you pass away. A key way the best Life Insurance providers differentiate themselves is in the additional benefits they offer.
These benefits commonly include:
- Digital GP services
- An advance from your benefit towards your funeral / probate fees if your benefit is tied up in probate
- Mental health support
- Support with bereavement for your family after a claim
- Access to estate planning / will writing / power of attorney services.
Is It Best To Write Life Insurance Into Trust?
Writing your Life Insurance into trust means the insurer pays your benefit into a trust first. The trust then passes it to your family. As a result, the payout never becomes part of your estate and therefore avoids inheritance tax.
While this is available with every insurer, the best Life Insurance providers let you do it easily online. This is opposed to the traditional way with wet signatures and paper forms going back and forth to trustees and the insurer.
If your insurer offers online trusts, your adviser can set up your trust with you when you apply. It’s a much smoother process that’s easier for everyone.