Which Do You Choose Cover All or Separate Policies?
A piece questioning a policy which gives many different types of cover.
Nearly 80% of the population don’t have life policy, income cover or significant illness cover. Partly due to cost but several understand it is just too hard to grasp. A new all encompassing package by the insurance firm Fortis Life could be the solution.
Honest Life Cover joins 5 distinct types of insurance in an individual policy: life protection; income cover; carers cover; improvement cover and critical illness. Severe illness covers 3 distinct illnesses which make up for 85% of all serious conditions claims –heart attack, cancer and stroke. An additional choice is cover for unemployment.
Funding monthly, Real Life Protection covers you financially for almost any event stopping you from working. Legal & General states the insurance plan offers a ‘fair and common sense’ level of security.
This Mortgage Protection has 2 funds. The first is designated the ‘life fund’: a lump sum is provided on diagnosis of a terminal affliction or in the event of death. The ‘active fund’ includes all other areas. Regardless of the amount of demands from the alive fund the life fund remains the same.
With the alive fund as long as you have money staying within, you can sign up for (up to a total of 6 years) as frequent income protection claims as you need. With each of the three serious ailments covered (heart attack, stroke and cancer you can make a single claim for each. If you need to cease full time employment and become a carer for a child or partner you can make an individual claim.
For protection for your income the cover plan provides 0.5% of the amount assured every five weeks. Convalescence cover allows a gross sum of 2.5% with an initial sum of eleven per cent for a serious illness claim or if you become an acknowledged carer.
An individual with a £100,000 policy who has a progressive illness diagnosed would gain through their severe ailment cover £12,000, transmitting eighty eight thousand pounds in their fund. If they then developed a severe long term medical issue they could claim financial insurance and benefit from £1,100 every month for six years and eight months. The life fund (£99,000) would continue the same.
A thirty nine year old female non smoker, in acceptable health, would provide a monthly premium of £36.90 for £110,000 Critical Illness Insurance . This premium being secured for the lifespan of the policy. A £110,000 critical complaint and fatality insurance plan would cost £56.75 every month, compared to Direct Line.
However, in the situation of a critical ailment compensation demand, Sainsbury’s will allow the total sum assured, one hundred thousand pounds. Real Life Cover will fund only 11%.
Robert Nelson, partner at independent personal finance company Moffat Financial Planning, suggests: ‘This is a novel venture but it is such a fragmented approach. Not everyone demands all this assorted cover, and protection for their income should protect you up until you decide to retire, not simply for a minimum nine year length of time. This is why the Real Life Cover monthly payments are so small.’
‘There is no point funding a tiny bit for different sectors of policy, if you do not want of them. It should be a suggestion to stick to life protection and protection for income with full cover as an alternative. I would rigidly urge someone seek an alternative view to see whether this venture really is suitable for their needs.’