There is no limit to the amount of life cover that an individual can hold. However, the amount of existing death benefit cover will be taken into consideration when applying for a policy.
The policy only covers a single life and will therefore only pay out in the event of the named individual’s death.
Two individuals are specified on the policy and the policy pays out once only on the death of either of the lives.
On joint life policies if it available for the policy to pay out upon the first death/event or the second.
You can select a specific date for when the cover expires. This may be, for example, the maturity date of your mortgage or perhaps when a child should no longer be financially dependent, such as at age 18 or 21. However the premiums calculated will take into consideration the term of the policy and the increased likelihood of a payment of benefits which increases the older an individual is when the Life cover ceases.
The premiums are guaranteed which means they will not change throughout the life of the policy, providing premiums are promptly paid and the policy does not lapse. The guaranteed premium option usually carries a higher initial monthly premium but makes budgeting easier as well as ensuring premiums do not go up in the long term due to age.
These are reviewed periodically and this is usually on the 5th anniversary of the policy’s commencement, then annually thereafter. Premiums will usually go up as the older the insured life (lives) become, however reviewable premiums tend to be less expensive than guaranteed premiums at inception of the policy.
Index Linking can be selected to protect the real value of the sum assured i.e. not decline against inflation. The sum assured can be linked to increase in line with an index, such as the Retail Price Index (RPI) or a fixed numerical value, if selected the premiums will similarly increase in line with the index.
This allows the individual in the event that they are unable to pay their monthly premiums as a result of accident, sickness or unemployment their regular contributions will be maintained by the Life Office to ensure the level of cover is retained. Inclusion of the feature will incur an additional charge to the policy premium.
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© 2023 A&J WEALTH MANAGEMENT LTD A&J Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority. Financial Services Register, no 428590, at www.fca.org.uk/register Registered in England, Company no: 5105933. Registered Head Office: Sawfords, Bigfrith Lane, Cookham Dean, Maidenhead, Berkshire SL6 9PH