Getting the priced quoted with legal and general

Cottage_Economy

Can anyone advise me on a query I have about occupations in a quote from legal and general for life assurance? Apologies if these sound like daft questions, but this is the first time I've applied for life assurance without an adviser so I'm a little unsure how some aspects work.

Going through Cavendish Online I have a quote for a joint level term life assurance policy for £110,000. We have been quoted £30.48 a month and i've opted for it to be index-linked. The product must be applied for online and I'll be putting it into trust. This policy will be in addition to a decreasing life assurance policy we already have to cover the mortgage, which was taken out in 2005. There's around £79,000 left on the mortgage.

On the personal illustration, it has automatically classed both my and my husband's occupation as class 4, which is for the riskiest occupations. I work a desk job and my husband is a postman. No serious illnesses or disabilities now or in the past, although my husband has an old neck injury that may be an exclusion. No children and neither will there be, so we opted for joint rather than two single policies.

My questions are these:

1. When I apply should L&G bring the premium down in line with the reduction in occupation risk (this is assuming the underwriters don't class something in our lives as risky and put the premium up)

2. Hubby and I picked our level of cover based on what our budget allows us to pay out every month at the moment (about £30 a month), on the basis that having some cover is better than not. However, if the premium does come down, we can afford to increase the amount of cover until the premiums reach about £30.

As this is an online product, if the original quote comes down and I want to change the policy, will I incur any fees as I have applied online but am then tailoring the policy over the phone?

dunstonh

1. When I apply should L&G bring the premium down in line with the reduction in occupation risk (this is assuming the underwriters don't class something in our lives as risky and put the premium up)

Unlikely they will. If no underwriter decision is involved, they will just accept you input at quote stage and leave on that basis.

As this is an online product, if the original quote comes down and I want to change the policy, will I incur any fees as I have applied online but am then tailoring the policy over the phone?

You will need to ask Cavendish. You also need to be careful about giving wrong information for quotes as an insurer could decide to refuse cover due to incorrect disclosure. You need to go back and change your quote to the correct occupation class and then apply on that quote.

Cottage_Economy

dunstonh wrote: »

You will need to ask Cavendish. You also need to be careful about giving wrong information for quotes as an insurer could decide to refuse cover due to incorrect disclosure. You need to go back and change your quote to the correct occupation class and then apply on that quote.

Thanks Dunstonh

I cannot find where on the Cavendish quote page I would change the occupation class?

It does say in the footnotes that the basic premium assumes good health and a non-hazardous occupation, but the personal illustration doesn't show this. It shows class 4.

kingstreet

If you have only life cover, with no waiver of premium, income protection or critical illness cover, the occupation class will have little, if any, impact on the premiums.

You are likely to find all occupations pay the same premium for life cover, but the premiums for the other options listed above may have been lower after underwriting.

kingstreet

I've just run a comparison case on the Exchange.

The premium for L&G life cover is the same for a postman as it is for an administrator for life cover alone.

Cottage_Economy

Thanks Kingstreet! Just out of interest why would that be? Wouldn't a hazardous occupation makes it more likely that the policy will pay out, or would it be the case that you are much more likely to have a critical illness or disability due to a a high risk occupation than actually lose your life?

And yes, we have just opted for life cover with no waiver of premium, income protection or critical illness cover. We already have own plans in place for those eventualities.

kingstreet

It's less likely you will die, so the normal occupation classes 1 - 4 are rated the same for life cover alone.

Particularly risky occupations, such as divers and demolition experts may be rated, or declined altogether by some firms.

There's "risk" and there's "risk" if you see what I mean...

Cottage_Economy

So, if I want this policy (with only life cover) I go ahead and apply online knowing that the premium will not come down. Assuming we're classifed in good health and that the occupation class doesn't matter in this case for the reasons above, we should get the cover for the premium quoted.

kingstreet

Yes. The premium quoted should apply, unless you have health issues, or abnormal height/weight which cause the insurer to offer revised terms following medical underwriting.

Cottage_Economy

Reading the key features document it says that any claim for terminal illness cover won't pay out during the last 12 months of the plan.

That's a bit of a bummer for someone who has paid years of premiums. What is the idea behind it?

Doesn't terminal illness cover help ensure that financial worries are reduced in your final months. I'd hate to think I'd get to that point and be forced to scrape to make ends meet just because I was in the final year of the plan...

kingstreet

Possibly because you may survive beyond the plan expiry date, in which case they would have no need to pay out?