A quicker payout
It is often an advantage to write your insurance scheme in trust as it is then kept separate from your assets and also, from inheritance tax. Also, your relatives will not have to wait for probate, allowing them to be paid their inheritance earlier, just at the time its most needed.

Two schemes are most frequently better than one.

Costs differ greatly, so look around for the best deal.
You can choose between buying a combined policy, which insures both of your lives, or you can have individual policies. Your choice will depend upon what the policy is needed for.

A double plan to cover your home loan.
When insuring your home loan, your cover will pay out on the expiry of the first individual covered by the scheme. Both of you need to be covered for identical amount and there is no need to maintain the scheme, as the home loan will have been settled.

An exclusive cover for family protection.
If you are deciding whether a plan for protection of loved ones, married people are recommended to have an individual scheme, for a mixture of reasons.

One of the two could be healthier and younger than the other, or possibly one of them is a non-smoker and will therefore be eligible for lower rates. Each individual will usually require a different level of protection, as their wages will be different one from another.
A surviving partner, who could be left with dependent kids, will continue to require life insurance until their youngsters are not dependent. If there is just one plan between the 2 of you, then the surviving spouse will be left without cover if their partner ceases to live.

Regular payments are worked out on the health and age of the applicant at the time when the policy is taken out. If the surviving spouse becomes ill as they grow older, then new policies will attract higher costs, and, in a few instances, not available.

If you organise two individual life insurance plans, they can be on unlike terms and for different values to reflect your personal requirements. They will both pay out on the death of your spouse or yourself within a specific term, but a combined plan only pays on the death of the first or last partner. It may astonish you to learn that having two policies can often be cheaper than having 1.

Cashing in Life Plans.
There are people, who may need to cash in their life insurance schemes because they have been identified with a a gravely serious health problem or need extensive health care, which they had not envisaged and cannot meet the costs. Faced with such problems, it is not hard to see why someone might decide to cash in parts of a life insurance scheme to allow payment of high cost and long term treatment. However you should understand that penalty costs may be applied.

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Protection insurance menus which give customers the opportunity to mix-and-match health and life insurance cover in a single comprehensive policy have been used for over 15 years. Regrettably the initial cheapest mortgage life cover insurance policies did not seem to be very attractive to clients although the idea was right. Administrative savings, a single set of paperwork and direct debit were accepted by both the consumer and the insurer. On the other hand the benefits provided by these options were outweighed by the drawbacks.

The choice of products given by the main pioneers, Scottish Provident, were not competitive.  IFAs investigated leading providers to form protective deals for the clients, which significantly reduced the rates found in protection menus. The insurance companies have now advanced and a large amount of new protection policies have been released which have acquired the support of many mediators.

Standard Life was the first to work out a winning formula when it re-launched it’s Self Assurance menu. They were soon followed by Legal and General, Liverpool Victoria Life, Friends Provident, Skandia Life, Scottish Equitable Protect and others are sure to shadow their lead shortly.

Three key details are found in nearly all protection options. Critical illness insurance cover quotes a number of stated critical conditions for which the insurer will pay out a lump sum. The least expensive option, term assurance, pays out a lump sum if you depart this life within a given period and nothing thereafter. The last one is income insurance, which provides you with a consistent income if long term disability or illness stops you from working. The options may offer you redundancy cover, which is usually limited to one or two years and may also be restricted to the payment of a mortgage. The chief attraction is the flexibility of the insurance products. For example various levels of life insurance cover can be organised for separate component parts, so should you make a claim on one part the others will still remain in force. No more medical information will be needed prior to major living events, like becoming married, having a baby, or moving house. These extra benefits are called ‘Guaranteed Insurability Options’.

Different components of cover may be included following the conclusion of a brief questionnaire and you are still able benefit from the normal policy discounts.

A case of the benefits obtained from a protection option is demonstrated by a young couple who went for Friends Provident’s Protection Choices option for mortgage protection life insurance. They are paying a joint policy of 31 pounds and 7 pence a month for separate critical illnesses and life policies, which have been written on a combined life basis. At the start they have cover of £109,990 which reduces as their 20 year homeowner loan is paid off. Life insurance would be paid out if 1 of them dies and the policy is ended, but the one surviving will still be covered for critical illness cover Life assurance will be maintained for both partner seven if one of them becomes ill and the insurance will pay out on whoever dies first.

If the couple had purchased a standard joint life insurance policy with Friends Provident they will only get a pay out on their 1st claim. Whereas with their Protection Choices insurance policy they are provided with two possible pay outs costing only 7 pounds more. Even if employees are sometimes provided with income protection at work they may also wish to cover their mortgage in the same way. Plus they could want to take out additional critical illnesscover and life cover not linked to their mortgage. Friends Provident’s  protection menu allows them to do so in a cost effective and straightforward way. The new features based products permit you to save money even though you can shop around for individual insurance policies and only save a few pence.

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