As Execution Only brokers,
we are unable to offer advice as to which type of life
insurance, or amount of cover, is suitable for your
We can however explain a little about some of
the terms and jargon that you might come across while
researching your own requirements. The information on this page
is a general guide only. You should read carefully any
literature relating to a policy that you are considering.
This type of life assurance will typically
initially start as a straightforward level term assurance plan.
It does however come with the option to convert the policy at
some point in the future, without further
medical underwriting. The option to convert the policy will
generally mean that the original plan, or part of it, can be
changed to another type of policy such as an increasing term
assurance, a whole of life policy or an endowment. Although this
can be done without any further medical evidence being required, the premium
appropriate to your age at the time will be payable.
This type of policy pays out on death and
will typically guarantee to pay off the
outstanding balance of a decreasing loan, such as a repayment
mortgage, provided the interest rate doesn’t
rise above a certain level over the term of the plan. It's
important therefore to make sure that any plan you are
considering does not have assumptions on likely mortgage
interest rates that may prove to be unrealistic over the term of
the plan, and your mortgage.
Most protection policies are designed to
provide a lump sum, either on death or diagnosis of a serious
illness. Family Income Benefit (often referred to as FIB) is
different in that it
provides a regular income instead. The income is usually paid
monthly to your dependants until a date specified by you at
application stage, should you die before that date. The benefit
can be paid either on death of a life assured, or on an earlier
critical illness if this option has been selected. Because FIB
does not provide a large amount of capital in one payment,
premiums are often lower than for other forms of term insurance.
The premium payable is guaranteed to remain the
same throughout the life of the policy. By default Aisa Direct
will provide all quotations based on guaranteed premiums.
See reviewable premiums
further down this page.
Where cover is required for two people this
can typically be arranged in one of two ways:
One Joint Life Policy
A joint life policy can be arranged so that
the benefits would be paid out following the death of either the
first, or if required for a specific reason, the second life assured (the
majority of policies are arranged ultimately to protect
financial dependants, with the sum assured or benefits being
paid on 1st death).
Two Single Life Policies
two separate single life policies, each person is covered
separately. If both lives assured were to
die at the same time, as the result of a car accident for
example, the full benefits would be payable on each of the
policies. If one of the lives assured died, benefits
would be paid for that policy, with the surviving partner having
continuing cover on their life. Because the levels of cover are
effectively doubled when compared to one joint life policy, the
costs of two single life will generally be a little higher, but
are unlikely to be twice as high. Using two single life policies
to provide cover usually therefore represents good value for
The sum assured
remains the same (level) throughout the term of the policy.
Discussed in more detail here.
The people covered by the policy (sometimes
referred to as the life or lives assured) and the owner of the
policy (sometimes referred to as the proposer) can be different.
Because the benefits of the policy are paid to the owner or
proposer, this arrangement can be useful in ensuring that
benefits are paid quickly to those who need them. For example, a
wife may own (be the proposer) a policy covering her husband's
life. In the event of her husband's death, the wife would
receive the policy proceeds quickly, without any probate delays.
Policies which have reviewable premiums are
generally subject to a series of policy reviews on dates
arranged at outset. Either the premium or the level of cover can change
at a policy review dates. The insurance company providing your
cover will undertake the review, based on it's overall claims
experience and market conditions at the time of the review. As a
result of this premiums may rise over the term or course of your
Most insurers will class you as a smoker if
you have used ANY tobacco based products in the 12 months prior
to submitting an application, and charge a higher rate for your
cover as a result. Some providers will allow someone who was a
smoker but subsequently stops to move onto non-smoker rates for
their cover, often after providing acceptable evidence they have
stopped, such as via a cotinine test, but in many cases the best
course of action may still be to make a new application for
cover based on non-smoker rates.
Terminal illness benefit is often confused
with Critical Illness benefit, although the two are completely
different. While Critical Illness benefit is something that has
to be specifically applied and paid for, Terminal Illness
benefit is now quite routinely included in most death only cover
policies at no extra cost.
It means that as well as the policy benefits
being paid if you were to die during the term of the policy,
benefits can also be paid if you are diagnosed with an illness
thought likely to lead to death within 12 months. In most cases,
a claim under the terminal illness benefit will not be allowed
in the last 18 months of a policy term.
An optional benefit which can be added to
most policies, after payment of an additional premium, to ensure
that the insurance company will cover the cost of your policy premiums
in the event that you are unable to work due to long-term ill health or incapacity.