Money Minder UK

What do I need to look out for?

It's extremely important you get to grips with the fine details of your policy so you understand exactly what your position is - after all this is where your peace of mind comes from.

This means understanding the terms and conditions of your life insurance policy.

It may be your personal circumstances change during the term of the policy - the current premiums or the eventual amount of the payment may no longer be appropriate.

Something that is guaranteed to change is the economy. A policy taken out 20 years previously might simply no longer cover all contingencies.

If you want to beat inflation you need to consider index-linked policies. The guaranteed payout and the premium payable of these are linked to the Retail Price Index, rising alongside it each year.

If you're considering an index-linked policy you need to establish whether the policy is linked automatically, or whether you need to opt-in to linkage each year; failure to do so could result in being locked out of future linking.

You should also be aware of all the rules and regulations surrounding a payout from your policy. Some policies may not, for example, pay out if death is caused by participation in certain dangerous sports or activities, but you can sometimes get policy add-ons to cover this eventuality.

If you receive life insurance as part of an occupational pension scheme you need to be sure the cover is maintained if and when you leave that company. If the policy is not maintained, a new one should be started as soon as possible and you should be aware there could be a period when you have no cover in place.

It is also important to remember that the longer you put off getting life insurance, the more expensive it will get.

If you're concerned about getting life insurance in place as soon as possible should consult our experts at Money Minder for expert help and advice.

Alternatively you can assess life insurance options specific to your circumstances by using our online personal finance consultant, the Finance Navigator. This helps you produce a bespoke guidance report and allows you to investigate the policies available online.

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