This is the lowest cost life insurance product available. There is no savings or investment component in the policy. Accordingly the policy continues for as long as you continue to pay the premiums. If you stop paying the premiums the cover stops and there is no surrender value. Premiums increase as you get older. The InsuranceLink Premium Calculator calculates premiums for term life insurance
What is mortgage repayment insurance?
Traditionally this was a life insurance policy where the amount of cover automatically decreased over the term of the policy. The general intention was that, in the event of premature death, the policy proceeds would be sufficient to repay the loan. Several difficulties have arisen with the use of these older policies. The amount of cover did not always match the outstanding loan balance. Also clients who wished to refinance or purchase a new home would find that the existing policy could not meet their new needs. Accordingly a new policy was required. The modern approach is to use normal term life policies for the purpose of securing loans. These are no more expensive but do not automatically reduce the cover. Clients can however reduce the cover if they wish at a future time.
How is my premium calculated?
Insurance companies have standard rates which they apply depending on the amount of cover sought, age, gender and smoking status of the life to be insured. However these are only preliminary and are not binding on the insurer. They are used to give an indication of the minimum premium available from that insurer. If you have good health and are not exposed to any dangers in your work or lifestyle then the standard rate may apply. Insurers however can apply loadings to those rates if you experience medical difficulties or are exposed to other dangers. Please refer to the InsuranceLink Premium Calculator for actual premium calculations based on individual circumstances
How are future premiums calculated?
These are calculated in the same way as your initial premium. However the insurance companies can change their underlying rates in future and there is no guarantee that the rates applying now will apply in future years.
Can my premium reduce in future?
Yes. There are many ways in which this can happen. If your initial premium was loaded (for example due to a medical condition or because you smoked) and there is a change in your circumstances, you can apply to the insurer to reduce the loading applying to your premium. Most companies also offer a discount for larger sums assured. If your cover is indexed to inflation which, in a future year, takes you into a new discount bracket, then your premium is likely to reduce. Most companies also offer a loyalty discount when you have retained your policy for a specified period. This may result in a reduction in your premium.
How should I determine the correct amount of insurance?
There is no magic formula. Only you can decide what you would want your family to have. Because life insurance is very affordable when purchased intelligently, many families choose to carry generous amounts of life insurance.
When does my insurance cover commence?
Most companies provide temporary limited cover on receipt of your signed application and payment of the first monthly premium. Full cover does not commence until the company has fully assessed your application and issued a policy.
When do I make my first premium payment?
Normally a direct debit authority is signed at the time of applying for cover. If the application is successful then the insurance company actions the direct debit authority for payment of the first and subsequent premiums. If the application is unsuccessful or the insurer offers insurance on terms that are not acceptable then the direct debit authority is not actioned.
Can I be sure that the insurance company is financially sound?
Lie insurance companies are not required to obtain official claims paying ratings but many of them do.
Can my policy be cancelled due to ill-health or other reasons?
Generally no. Once the policy is issued it cannot be cancelled by the insurance company providing that the required premiums continue to be paid. However the insurer may be able to cancel the policy if false information has been supplied in the application.
Can I protect my insurance cover if I become disabled?
Yes. For a small additional premium the insurance company can agree to waive premium payments if you become disabled. It is important to check each companies definition of 'disabled' to ensure that you know what protection you are obtaining for the additional premium.
Can I increase my cover in future?
Yes. Many policies can be automatically increased if certain events occur (for example the birth of a child, increase in your mortgage). For an additional initial premium you can also purchase the right to automatically increase the amount of your cover in future without further medical evidence. Otherwise you always have the right to apply to your insurer for further cover - depending on the circumstances the company may require further medical evidence.
What if I smoke?
Smoker rates are higher than for non-smokers. Most companies require that you have been a non-smoker for at least 12 months before qualifying for the non-smoker rates. Actual loadings vary depending on age and gender. Details are available using the InsuranceLink Premium Calculator
What if I change my mind after the policy has been issued?
The law provides that you are given a 15 day 'free-look' period after receiving your policy. If you decide not to proceed then you simply advise the insurance company (no reasons are needed) and your initial premium payment will immediately be refunded to you.
Will I need to have a medical examination?
This depends on the amount of insurance cover you require, your age and state of health. Even if a test is required this can normally be carried out by a registered nurse at a time and place suitable to you. The insurance company pays for this.