As frustrating as it may be, getting life insurance isn't an easy route for some of us. Cover can be restricted to people due to their age, health, lifestyle or occupation - even if you can get cover, it may be costly. But don’t fret, Guaranteed life insurance may be able to provide you with coverage, regardless of your circumstances.
This article covers any queries you may have such as:
What is guaranteed life insurance?
How does guaranteed life insurance work?
Who needs guaranteed life insurance?
What are the pros and cons of guaranteed life insurance?
Putting a guaranteed life insurance policy in trust?
What is guaranteed life insurance?
Guaranteed life insurance (also known as ‘guaranteed life acceptance’) works similarly to a standard whole of life insurance policy. The big difference is that it’s designed for people who may struggle to get accepted for life insurance cover. This can be due to a persons age or health.
As you get older, getting life insurance can become much more difficult, with companies assessing factors like your age, health and occupation.
With guaranteed life insurance - as the name suggests, you’re guaranteed acceptance for a life insurance policy regardless of your health or occupation.
When applying for fully medically underwritten Life Insurance, companies may require you to undergo a medical exam and will ask you some basic health and lifestyle questions - with guaranteed life insurance, this isn't the case.
It is available for those who may struggle to get a medically underwritten life insurance policy or pay high costs for medically underwritten life insurance.
How does guaranteed life insurance work?
Just like any life insurance policy, guaranteed life insurance pays out a lump sum to your loved ones when you die. You have to keep paying your monthly premiums to stay covered, otherwise, the policy won't pay out on your death.
Though the payout is guaranteed, there are drawbacks to this type of policy. Some insurers may not pay out the full amount if you die within the first 12 months of taking out the policy. In other cases, they may only repay the premiums paid so far.
Most guaranteed life insurance policies are available for those who are:
Aged 50 & over - the age cap (the maximum age over 50 that you can be and still take out a policy) varies from provider to provider. If you’re a smoker, the age cap may be reduced.
- A permanent resident of the UK - excluding the Channel Islands and the Isle of Man.
Do I need guaranteed life insurance?
There are several reasons why you maychoose guaranteed life insurance, including if:
You have any pre-existing medical conditions which make medically underwritten life insurance cost prohibitive or not possible to secure.
You have high risk hobbies or an occupation which makes medically underwritten life insurance cost prohibitive or not possible to secure.
You are looking to secure cover quickly, without the need to complete lengthy medical forms or fulfil requirements for GP reports or medical screenings when applying for your policy.
If any of these apply to you, there is a chance that you’ll struggle to be accepted for a standard life insurance policy, which is why you may turn to guaranteed life insurance.
What are the pros & cons of guaranteed life insurance?
It doesn't matter what you are buying, it's always best to factor in the pros and cons of a product or service before you commit to it. You may already have some doubts about guaranteed life insurance, so sorting out the positives and negatives helps for a fresh perspective.
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Writing a guaranteed life insurance policy in trust
Thankfully, you will be able to write your guaranteed life insurance policy in trust. This is mainly to prevent it from being taxed when it eventually pays out. In some cases, a life insurance policy can be considered part of your estate and liable for inheritance tax.
In reality, you only need to consider this if the total value of your estate is likely to go over the inheritance tax cap. An important thing to note, if you write a life insurance policy into trust, it cannot be undone. Once you proceed, you won't be able to withdraw it later down the line.
For more information, check out our insightful guide on writing your policy in trust.
Struggling to find the right policy? We're happy to help.
Whether you're struggling to find the right policy for you and your family or have any queries about types of policies - we're always happy to help. Our specialists are always on hand to guide you through the process, finding the best policy whatever your circumstances are.
Speak to the experts...
Give our advisers a call today.
Our team of friendly and professional advisers are on hand to help with any questions you may have regarding Life Insurance.
The advisers can also make recommendations tailored to your current situation and will research the market on your behalf, ensuring you secure the cover you need and supporting you every step of the way.
01392 436 193(Monday to Friday, 9am - 5.30pm)
