FAQs

How much does protection cost?

There are no set costs for protection. Every client is different, and the costs of cover are based on several factors such as age, lifestyle choices, hobbies, medical history, occupation, and the amount of cover being requested.

Some examples are:
A healthy 30-year-old who is a non-smoker would pay £7.84 pcm for £250,000 of Life Cover for 15 years of cover, or £13.95 pcm for £500,000 of Life Cover.

A healthy 35-year-old who is non smoker, but does manual labour, would pay £26.31 pcm for £100,000 of Life Cover with Critical Illness cover for 15 years.

A healthy 30-year-old smoker who works in an office would pay £34.35 pcm for £1,500 pcm Income Protection to the age of 68 years.

A healthy 60-year-old non-smoker who is retired would pay £11.58 pcm for £10,000 Life Cover to the age of 90 years.

A healthy couple who are both 40 years old, and are both non smokers, would pay £17.36 pcm to cover a £250,000 repayment mortgage for 15 years.

How do I find out what cover I currently have?

If you can’t find your documents, you can contact your current insurer to ask what cover you have in place. They should be able to find you from your personal details. It is also likely that your policy number is the reference number next to the monthly Direct Debit to them that you see on your Bank
Statements.

Alternatively, you can provide your chosen broker with permission to talk to the insurer on your behalf. This permission is done via a Letter of Authority.

What is the difference between Critical Illness cover and Terminal Illness cover?

Critical Illness cover pays a lump sum if you are diagnosed with a specified critical illness during the term of your policy. A critical illness is not necessarily fatal but it can have a huge impact on your quality of life and can prevent you from working for a prolonged period. The most common critical illness claims are for cancer, heart attack, stroke, and loss of independent existence.

Terminal Illness cover pays a lump sum if you are diagnosed with 12 months or less to live. This cover pays you before you die and is a standard addition on all life insurance policies at no extra cost.

Why use a broker?

Just like anything, if you are not an expert in something it can pay to speak to someone who is. There are many different insurers in the market and many different products that an experienced broker will consider:

1. The right product for you – This can range from ensuring you have the most cost efficient or tax efficient product to meet your needs, to ensuring you are aware of the most up-to date policies on the market.

2. The right insurer for you – This ensures you are with the provider who is the most competitive for your own individual circumstances. Just because one insurer may appear at the top of a price comparison table doesn’t mean they will still be the cheapest once an application is submitted. It is common to find that the price increases significantly after completing the medical questionnaire and submitting the application or, an exclusion is placed upon a policy which means that you cannot claim under certain circumstances. However, an experienced broker will often be able to place you with an alternative insurer who can offer better terms.

3. One point of contact – It can be incredibly time consuming to contact and apply to an insurer or to discuss amendments to an existing policy. A professional broker can be your sole point of contact and deal with all of your insurers on your behalf.

4. Cost – Taking cover out online, or direct with the insurer, can often result in you paying more for your protection policies. A good broker will have negotiated discounted rates with the major insurers to ensure their clients have the most competitive deals. Because of the volume of business that is done, and the fact that the insurer does not have to pay their staff and office costs to handle your application, an insurer will often offer the broker a discounted rate.

Do I have to pay a fee?

It is not illegal for a life insurance broker to charge a fee, but it is uncommon. Brokers usually do not
charge the client a fee because they get paid a commission by the insurer.

Haven Financial Solutions Ltd do not charge a fee to our clients for Life Insurance and other protection policies that cover your health and mortgage.

How do I know if my policy is competitive?

If you have taken your policy through a broker, they should have checked the cost of the policy against other providers in the marketplace. Your broker should also review the policy every 1-2 years to ensure the policy remains competitive.

If you took your policy through a “single-tie” broker or a bank, who are usually tied to one insurer, then it is advisable to either do your own research or ask a professional to carry out a market review and compare your policy against current prices. In the case of policies taken with banks or single-tie advisers, it is common that the premiums are “loaded”. This means that the premiums are inflated to pay the adviser more commission. In these circumstances, clients are often paying more than they should – often around 30% more.

What if I have been turned down for cover in the past?

If you have been turned down recently by a number of major UK insurers, then it is likely you will not be able to get cover at the moment..

If you have been turned down by a single insurer or have not applied recently, then it is worth speaking to a professional broker who will ask questions about your past health concerns and your current lifestyle to understand which insurer may be able to offer cover.

Since Haven brokers aren’t tied to a single insurer and can source products from a large market, we have regularly been able to obtain cover for clients who have been refused insurance in the past. We have done this by taking the time and effort to research the health conditions and relay this in detail to the insurers who look more favourably on the medical issues.

How often should I review my policy?

There are perhaps two answers to this question:

1. Anytime anything significant happens in your life such as pregnancy, occupation or income changes, marriage or divorce, moving home, obtaining or changing your mortgage.

2. Every 1-2 years we would advise that you have a review with your broker to check that your policy still meets your needs. It is also at this time that we would research the market to ensure that your rate remains competitive and check your cover against new products which may offer more cover and an improved range of benefits. Equally, your existing policy may offer benefits that are no longer available, and it is worth finding this out from an experienced broker who can complete an accurate comparison, so that you understand the importance of keeping the cover in place.

What if my circumstances change and I want to change my cover?

Depending on your change in circumstances you may or may not be able to alter your existing life cover. Some policies include a benefit called “guaranteed insurability option” (GIO). This benefit can allow you to increase your cover at certain life events, such as having children or buying a home. However, there is usually a limit to this increase and, in our experience, this limit is often too low for the change that is required.

If you are healthy and have had no major health or lifestyle changes since you originally took your policy, it may be simpler to replace the policy with a new one. However, it is worth getting a broker to first check what the cost will be and check that you will not lose any benefits that may no longer be available in the insurance market.

Remember, just because your current insurer was the best option at the time, they may no longer be the most competitive or comprehensive insurer for you and conducting a market review is best practice before applying for a new policy.

Which insurer is the best?

Depending on your change in circumstances you may or may not be able to alter your existing life cover. Some policies include a benefit called “guaranteed insurability option” (GIO). This benefit can allow you to increase your cover at certain life events, such as having children or buying a home. However, there is usually a limit to this increase and, in our experience, this limit is often too low for the change that is required.

If you are healthy and have had no major health or lifestyle changes since you originally took your policy, it may be simpler to replace the policy with a new one. However, it is worth getting a broker to first check what the cost will be and check that you will not lose any benefits that may no longer be available in the insurance market.

Remember, just because your current insurer was the best option at the time, they may no longer be the most competitive or comprehensive insurer for you and conducting a market review is best practice before applying for a new policy.

 AIG  Aviva  Legal & General  LV  Vitality  Zurich
 99%  98.9%  98%  94.6%  99%  99%

*information provided by each insurer at the time of writing

It is worth noting that claims that are not paid out are usually due to the applicant having omitted a medical issue at the application stage which then becomes apparent at the time of the attempted claim.

Haven also recommends and uses insurers who are registered with the Financial Services Compensation Service (FSCS). This is a form of protection in the event that the insurer collapses and ceases trading. If this were to happen, the government will guarantee the majority of the amount for which you are insured.

Should I put my policy into trust?

In most circumstances, we would advise that you put your policy or policies into trust. This is especially the case for life cover policies. Putting a policy into trust means that you are naming a person or people to receive your Life Cover in the event of your death.

The key benefits of placing your policy into trust are:

1. Tax – After death, Inheritance Tax could be applied to the money, assets and possessions of the person who has died. These things are collectively known as the Estate. The first £325,000 of an estate of an individual is tax free. But, a 40% Inheritance Tax can be applied to the amount above the tax-free threshold. A Life Cover policy in trust will typically be tax- free even if the estate is in excess of the inheritance tax threshold. This is because the policy sits within the trust rather than inside the estate and thus belongs to the beneficiary or beneficiaries.

2. Speed – When someone dies, there is a lengthy process of probate where the estate has to be accounted for and documented. Then taxes, debts, and fees may have to be paid before any inheritance is distributed to the beneficiary or beneficiaries. By placing a Life Cover policy into trust, the money bypasses probate and is paid immediately to those who are named in the trust. This is because technically the money belongs to the beneficiary or beneficiaries and not to the person who was insured.

3. Choosing Beneficiaries – Whether or not you have a will in place, you can nominate your chosen beneficiary or beneficiaries in your trust to ensure that your Life Cover policy is paid to them. Again, because the policy will sit within the trust, it is not affected by whether you have a will in place or not.

We strongly recommend that you seek professional advice from a broker or advisor before selecting which type of trust to use, and how it should be set-up.

When shouldn’t I put my policy into trust?

You may not want to put a policy in trust if you want the policy to be paid directly into your estate to clear a debt such as a loan or a mortgage.

If you have a Life & Critical Illness policy, you should consider a “split trust” where the life cover portion of the policy is placed into trust but not the critical Illness portion of the policy. The latter is retained by you (often referred to as your retained benefits) and means that if you were critically ill you would receive your critical illness benefit. But, if you die, your life cover will be paid to your chosen beneficiary or beneficiaries.

What if I need to claim?

If you have taken your policy through a professional broker or advisor, they should guide you through this process. Whilst they will usually be unable to complete the full claim for you, they will offer you directions on how best to complete the claims forms. At Haven we prefer to obtain a Letter of Authority from you so that we can help by discussing the claim with the insurer on your behalf. This can help to speed up the process and reduce the pressure on you at an already stressful time.

If you have taken your policy online directly with the insurer, or through a non-advised service such as a call-centre, then you will usually have to contact the insurer yourself and negotiate the claims process. Some insurers will provide you with a single point of contact throughout your claims process, but others will not. We advise that you keep a written record of whom you have spoken to and what has been said.

How long does it take to claim?

This can vary from 7-10 days for a straightforward claim to around 3 months for a more complex case.

The main delay on life cover applications is either incomplete or incorrect documents being provided to the insurer, or a delay caused by a GP or consultant in writing a report and forwarding it to the insurer.

If you have taken your cover through a broker or advisor, they may be prepared to help with your claim to speed this up. At Haven, we are happy for you to provide us with a Letter of Authority and will chase up both insurers and medical professionals on your behalf.

Please note, terms and conditions apply for these insurance products. This information is a summary only. You will receive a full policy document upon application, and this will set out the terms, conditions, and limitations of the cover provided under the plan.

For your free review, please call us at +44 (0) 1202 082 380 or email us at
info@havenfs.co.uk
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