Term Assurance/Insurance Help Please??

kiwichick

HI All,

I am after some advice please. My husband and I are due to exchange contracts on our new house on the 24th of feb and all was going well until the post arrvied today.

We have received a letter from Legal and General with regard to the Term Assurance/Insurance on the mortgage.

They have said the policy has been underwritten but included the following points;

*They are unable to offer Guaranteed Insurability Options on the policy.
*It has not been possible to cover either of the applicants for the Waiver of Premium Benefit for Prolonged Sickness. The premium shown reflects this.

I dont know what either of these terms mean,nor how important/or not, they are. Is anyone able to help me? I'd like to have a better understanding of it before having to call them on Monday.

Many Thanks,
Allison.

AndrewSmith

Hi,

Guaranteed premium means that the policy premiums (monthly cost) will not increase throughout the life of the plan. If this has not been offered the policy premiums will be reviewed every 5 years and could be increased at this time. Not having Guaranteed Insurability means that any additional future cover ( fro selected special events) will be separately underwritten as a new policy and subject to medical evidence at the time.

Wavier of premium is where the insurance company will continue to pay the premiums for you if you are unable to do so through ill health (exact coverage will be in the Key Features Document you will have recieved with the initial quote). If they are not including this, then you will have to continue the premiums yourself if off work ill for a long period.



Hope this helps.

payless

AndrewSmith wrote:

Hi,

Guaranteed insurability means that the policy premiums (monthly cost) will not increase throughout the life of the plan. If this has not been offered the policy premiums will be reviewed every 5 years and could be increased at this time. It also means that any additional future cover will be separately underwritten as a new policy and subject to medical evidence at the time.

.

This is (partly) incorrect, what Andrew is describing in the first part is reviewable premiums- just because they have declined "guaranteed insurability" does not mean they will only offer reviewable premiums & not offer "guranteed premiums" , indeed I see no reason why any company would want to transfer a case from guaranteed to reviewable terms given that any review is applied a cross the board to all "similiar plans" not to single policies ( plus if we are talking life cover only most providers don't do reviewable anyway)

Guaranteed insurability- is an option that allows you to increase your cover in ceratin circumstances (ie if increasing mortgage for home improvements or house move- varies on different plans ) - importantly without need to provide further evidence of health


For example I recently obtained cover for a client with MS under such an option- no medidal questions , no loading of premium.

Yes it's nice to have , but I have seen many cases recently where different providers are excluding it ( and with waiver being excluded also maybe something in your case that worries them) - my guess is you never knew that option existed, so you could take the plan on that basis , or try eslewhere and hope its included as standard and not then excluded

Waiver - a lot of advisers seem to make a big deal about it, and on Income protection/ sickness plans yes its important, IMO if we are talking a smallish life premium again maybe not such as great issue, in fact it may be the answers to the extra questions asked for selecting this cover thats lead them to excluding guaranteed insurability

L&G - did you buy from a L&G adviser, as they used to, and may still do, offer dual priving - cheaper via IFAs/ whole of market protecion advisers, than thro' their "tied advisers"

dunstonh

L&G - did you buy from a L&G adviser, as they used to, and may still do, offer dual priving - cheaper via IFAs/ whole of market protecion advisers, than thro' their "tied advisers"

The L&G tied advisor pricing is still higher than the IFA pricing.

AndrewSmith

Saturday evening, Freudian Slip.

My most humble apologies.