Insurance and Protection FAQs

Buying a property is a massive financial commitment, which is exactly why you should have the right type of mortgage protection in place. We’ve put together a list of the questions we get asked the most about the different types of insurance available. If you have any other questions, please get in touch.

Learn more about Mortgage payment protection services here. You can also download our Protection Guide here.

mortgage protection

Can I get Life Insurance through my employer?

This depends on your employer. Your employer may offer some death in-service benefit that would pay out a lump sum based on a multiple of your salary. This benefit would only be in place while you remained an employee, so if you decided to leave, you would need to buy separate cover which if you have medical issues could be difficult.

What Life Insurance term do I need?

You need to think about why and what you want the insurance to cover. If it’s for a mortgage, then the term should coincide with the amount of time you have left on your mortgage. Alternatively, if you have young children, you might want to ensure they are covered up to their 18th or 21st birthdays.

How much is Life Insurance?

This varies depending on the amount of cover required, the term, your health and the risk associated with your job.  Contact us to discuss your requirements and we will obtain an accurate quotation for you.

Are Life Insurance premiums fixed?

Life cover can be either guaranteed or reviewable. This is dependent on what product you choose, but guaranteed cover offers fixed premiums for the term of the plan and reviewable cover will involve the policy being reviewed periodically, usually every 5-10 years.

Is Life Insurance Taxable?

Proceeds from the claim of a life insurance policy are paid out tax free. However, Inheritance tax (IHT) could be incurred as this will form part of your estate. This can be avoided if the policy is written ‘in trust’ or your estate is below the minimum threshold.

What conditions does Critical Illness cover?

The illnesses that a Critical Illness policy will cover varies between insurers, but the ABI have specified 38 illnesses that must be covered. You can view these 38 illnesses at the following website:  ABI. Some insurers cover many more illnesses than the standard 38.

When will the Critical Illness policy pay out?

The policy will pay out once you have been diagnosed with a covered critical illness. This pay-out will require a survival period of 14-30 days depending on the insurer.

Can a Joint Life & Critical Illness policy pay out twice?

Yes, it can be chosen as an option on some policies. It’s called ‘buy back’ and it allows the insured to claim for a critical illness and continue with the life cover without the need for additional underwriting.

How much cover can I get with Income Protection?

Like all insurance, it will vary policy to policy, but the usual amount would be around 70% of your gross annual salary.

What’s the difference between Life Insurance & Family Income Benefit (FIB)?

Both pay out on death, but life insurance will pay a lump sum and FIB will pay out a monthly sum over a certain period of time. FIB is particularly useful when the main breadwinner passes as it provides a monthly income to support the widower and any children.

What’s Waiver of Premium (WoP)?

Waiver of Premium provides a useful optional extra to Life insurance and Critical Illness insurance policies. If you are unable to work due to ill health, with WoP in place and after a deferred period,  the policy would be maintained without the need to pay the premiums until such time as you reach a specific age, return to work, die or the policy term expires.

How much cover can I get with Income Protection?

Like all insurance, it will vary policy to policy, but the maximum cover is usually 70% of your gross annual salary. Income payments are made tax free.

Is Buildings and Contents Insurance compulsory?

If you own or intend to purchase a freehold property, building insurance is normally required by the mortgage lender. Contents insurance is entirely optional, but recommended.