The following are a list of frequently asked life and pensions questions and answers, which we hope you find useful.
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What is Mortgage Protection?
Mortgage protection is a form of life insurance policy, where the amount of life cover reduces over time. It ensures that your remaining mortgage will be paid off if you die during the term of your loan. Most lenders will require that you have mortgage protection in place prior to allowing you to draw down a mortgage.
Term assurance is a form of life insurance policy, which pays out a lump sum if you die during the term of the plan. You choose the term and the amount of cover you need at the start of the plan, and can decide whether you want this amount to stay the same or be indexed each year. Once you have been accepted for cover by the insurer, the premium you pay is guaranteed to stay the same for the entire period that you are insured for.
An Income protection policy is designed to provide you with a partial replacement income after a certain period of time, if you cannot work due to any long-term illness, injury or disability. You can take out income protection cover if you are in full-time work or are self-employed and earn an income. Cover can run up to age 65, or until you are able to return to your normal occupation.
Specified Illness cover pays out a lump sum in the event that you are diagnosed with one of the range of serious illnesses covered under the plan. It frequently also offers a partial payment of for a range of milder but still life altering illnesses. Specified Illness cover can be taken out as a standalone plan, or included under a mortgage protection or term assurance plan.
Apart from cover that is usually required when taking out a mortgage or other loan, most people will require additional cover at certain periods during their lifetime. When you have a young family, for example, you may need to ensure that they are provided for financially if you pass away unexpectedly. Later in life, you may need cover to pay off debts or help settle your estate and relieve the burden of Inheritance Tax on your loved ones.
The insurer will take into account a number of factors when determining your premium. Generally, the premium quoted will depend on your age, whether you are a smoker or not, the amount of cover you require and the length of time you need the cover to last. If you have an underlying medical condition, an insurer may take this into account when setting their premium.
Your initial application will require you to complete a number of health-related questions. In many cases, your application will be accepted immediately. However, depending on the information you provide, and/or when there is a larger sum assured, the insurer may request additional information from your doctor, or for you to attend for an independent medical examination. Any costs involved in obtaining additional medical information required will be covered by the insurer.
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