When was the last time you reviewed your life insurance, income protection, or critical illness cover?
If it’s been a while, you could be paying way over the odds for your cover. You might have insufficient protection for your current needs. And you could be saddled with poor-quality cover that won’t protect you when you need it to.
This has recently come to light as an investigation by FTAdviser found that some financial advice firms were “loading” life insurance premiums by up to 30%. This means you could be paying significantly more for your cover than you need to.
Read on to find out three reasons to review your protection, and how we could help you to save money and benefit from the right cover for your needs.
1. You might be paying too much
Many financial advice firms charge “loaded premiums” for products such as life insurance.
Loaded premiums are an additional percentage fee charged on the sum assured by the insurer each month. Independent advisers, networks, and firms can choose whether to use a panel of insurers which charges loaded premiums or not.
Roger Edwards, former managing director at Royal London, likened loaded premiums to “buying a concert ticket and then paying a £6 admin fee on top”.
If you took your life insurance out through a third party – perhaps the firm who arranged a mortgage for you in the past – then you could be paying significantly more than you need to. Over the term of a life insurance policy, this could easily run into thousands of pounds.
For example, if the standard monthly cost of your life insurance was £30, a loaded premium could see you pay an additional 25% each month – adding £7.50 to your monthly premium. Over the course of a 30-year policy, this loaded premium means you’ll pay £2,700 more than you need to.
Financial expert, Dave Corbett, told FTAdviser: “Clients haven’t got a clue they are paying for a loaded premium. It’s pure greed lining advisers’ pockets.”
Our view is that, as you wouldn’t expect to pay 30% more for your mortgage, why should you for your life insurance? This is why we never charge a loaded premium.
We saw a recent case where one of our clients was paying around 20% more than the current market cost for their protection. As we are independent and have access to dozens of the UK’s leading insurers, we were able to obtain the equivalent cover at a significantly cheaper rate.
So, if you have any protection products, it’s worth a quick chat with us to establish whether you’re paying more than you need to. We can research the market on your behalf and let you know whether it’s possible to obtain the cover you need at a more competitive price.
Email [email protected] or call us on +44 (0) 20 3411 0079.
2. You might not have enough cover
If your circumstances have changed since you originally took out your protection, it’s likely that you’ll need to review your cover. It’s always wise to look at the protection you have in place when:
- You have children
- You get married, or separate/divorce
- You move home
- You change your job or employer
- Your income changes.
If you don’t regularly review your cover, you run the risk of any payout being insufficient for your current needs.
For example, your life insurance may not be enough to maintain your family’s lifestyle if you’ve had children since you took out your original policy. And, if you have changed employer, you may have lost valuable benefits that you now need to replace.
We can look at your current circumstances and future plans and establish if there are any gaps in your protection arrangements. We can then help you find cost-effective cover that will provide you with valuable peace of mind.
3. You may be able to benefit from better quality cover
In recent years, protection such as critical illness and income protection has come on leaps and bounds. Many insurers now cover a wider range of illnesses and conditions and have added additional benefits to their contracts.
While some old policies have good critical illness definitions, there have been significant improvements in other areas. So, reviewing your protection might result in you getting better quality cover.
It’s important here to speak to a knowledgeable and experienced adviser who can help you find the most appropriate protection for you. As policies improve, we can make sure you have suitable cover without paying loaded premiums for the privilege.
Get in touch
If you have any protection policies in place, get in touch with us to find out if we can save you money. We can also establish whether your cover is still appropriate for your needs and give you the peace of mind that you and your family are protected.
Email [email protected] or call us on +44 (0) 20 3411 0079 to find out more.
