Life Insurance: get help getting covered

Many people choose life insurance with a specific purpose in mind and an idea of who they want to leave their money to. 

Normally that would be your partner or children. But it might be someone else like a parent or a sibling, or even someone who’s just a special friend.

You may have a mortgage or other outstanding loans that need clearing if you're not around to do so. To leave money to fund private or university education for your children or dependents. Or cover the hundreds of thousands it costs on average to bring children up until they're ready to leave home (LV=, Cost of a Child Report, 2015). 

There are different types of life insurance depending upon your needs, so it’s important you get all the facts before you get a quote.

Remember though, that if you want any benefit to go to a specific person then you could consider writing the policy into trust. For more information on this you should speak to an independent advisor.

We can provide life insurance for up to £500,000, and monthly payments start from just £7 a month. You just need to decide how much cover you want or can afford each month. 

Do some calculations or get someone to help you. If you have a mortgage, think about what's left to pay. Then consider all the day-to-day living costs and other one-off costs your family might face over the time period they'd normally depend on you for.

Be realistic. Include rent, utility bills, education costs, birthdays, weddings and holidays. These costs can add up. 

The Money Advice Service has lots of calculator tools that can help.

You can choose how long you want to be protected and decide the length (or term) of the policy.

It can last any whole numbers of years between 5 and 50; but it must end by your 81st birthday.

When deciding your term, think about how long's left on your mortgage, when your children will be out of education and earning their own keep, and how old your partner's likely to be when they retire.

And remember, the length of the cover will have an impact on what you pay each month. Once your policy has started you may be able to reduce the term but you can't increase it. And when your policy term ends you'll no longer have insurance.

You can work this out in two ways. Decide how much you'd like your beneficiaries to receive and see how much that will cost. Or choose what you’d like to pay and see what cash sum that will buy.

Generally, the more you contribute the greater the amount your beneficiaries will receive. But consider the effect of inflation when making your calculations. 

The amount you are insured against isn’t index linked so its real value will fall over time, unless you choose an increasing cover policy (see below). So £100,000 today wouldn't be worth £100,000 in 20 years' time.

The Bank of England’s Inflation Calculator lets you see the impact of inflation over time.

Post Office Money Life Insurance is a life assurance policy that pays an amount of money (cash sum) if, during your chosen policy term, you die or are diagnosed with a terminal illness that meets the definition, as per the Terms and Conditions. 

If we pay your cash sum your policy will end. If you're still alive at the end of your policy term and haven't been diagnosed with a terminal illness, your policy will end and you won't receive a pay-out.

Is your partner the main income earner? Would they need to continue working if you died? Life insurance could help them pay someone to do tasks you currently do around the house or elsewhere. Housework, preparing meals, looking after your children and so on.

No. We're introducing this soon but it's not available right now. 

What you pay depends not only on the amount of cover and your term, but also to an extent on you. Your age, medical history and lifestyle will be taken into account when calculating your monthly payments.

Life insurance costs more the older you get. That's because statistically you’re more likely to die as you advance in years. Because the insurer only pays out if you die, the younger and healthier you are the less life insurance costs. Smokers and people who lead unhealthy lifestyles or have a pre-existing medical condition will find life insurance more expensive too or may be unable to obtain cover. 

If you're applying for Post Office Money Life Insurance, we'll only ask you the questions we need to get your price. 

Please be honest when answering any questions we do ask, though. Giving incorrect or inaccurate information may reduce your pay-out in the event of a claim or worst case your policy may be cancelled and any claim refused. 

Your monthly payments will continue until the earliest of these:

• The end of the term of your policy
• Your death
• Our acceptance of your diagnosis of a terminal illness

If you make a claim after being diagnosed with a terminal illness, please don't stop paying your monthly payments until we've confirmed your terminal illness meets our definition, as per the Terms and Conditions. 

A cash sum payment could be made if you die within the term of the policy. We'll pay it out early if you're diagnosed with a terminal illness that meets the definition (as per the Terms and Conditions) with a life expectancy of less than 18 months. We only pay out for terminal illness once, and the policy will end once we do.

The policy is not guaranteed to pay off your loan or mortgage (if this is the purpose of the policy).

The policy has no cash in value. The policy ends if you stop making monthly payments during the payment term. Your sum assured is dependent on your age and your chosen monthly payment amount.

In the first policy year we won't pay the sum assured if:

• Death is caused by suicide or intentional self-inflicted injury; or
• A terminal illness is caused by intentional self-inflicted injury.

We won’t pay a terminal illness claim if:

• You don’t meet our definition of a terminal illness (see below)
• It's caused by an intentional self-inflicted injury within 12 months of your policy's start date

If you don’t keep up your monthly payments you'll no longer be covered and we won't pay a claim. Your policy and cover will be cancelled 60 days after the payment was due and you’ll get nothing back.

If you don't provide any information we ask for, we may not pay out under the plan. Or we may amend or cancel a policy if the information you provided when you applied or when a claim is made, isn't complete, accurate and truthful.

The sum assured reduces each month in line with the amount owed on a repayment mortgage with a fixed interest rate of 7%.

The sum assured increases annually on the anniversary of the policy's start date at 3% to reduce the impact of inflation. The increasing rate will be 3% compound. Please note that your premium will also increase.

Our terminal illness definition is a definite diagnosis by the attending consultant of an illness that:

• Has no known cure or has progressed to the point where it can't be cured, and
• Is expected to lead to death within 18 months, in the attending consultant's opinion

• An attending consultant is someone who holds a consultant or equivalent appointment at a UK hospital or comparable qualification outside the UK. They must be accepted by our Chief Medical Officer and a specialist appropriate to the cause of the claim.

No we cover for terminal illness but not critical illness.

It pays a cash sum if you suffer from heart attacks, strokes (depending on the severity) or certain types of cancers that meet our definition, during the term of your Life Insurance policy.

At such a difficult time, it can ease financial pressures on you, your family or your partner – like helping pay for a mortgage, rent, everyday living costs, even modifications needed to your home as a result of your illness.

Our Life Insurance policies include Terminal Illness cover at no extra cost. It can pay out 100% of the cash sum of your life cover policy if you're diagnosed with an illness that meets our terminal illness definition as detailed within the Terms and Conditions. If it does, your policy will end.

You pay extra each month for our Critical Illness cover, but it will pay out an extra cash sum if you're diagnosed with a critical illness that meets our definitions.

Once we’ve paid a claim for a critical illness your Critical Illness cover  will stop. However, the rest of your policy will continue and future monthly payments will reduce as you won’t be paying for the Critical Illness cover. As long as you keep paying, your life cover cash sum will stay in place for the duration of your policy.

You add the Critical Illness Cover when you take out Post Office Money Life Insurance. Just pay more each month to get an extra cash sum equivalent to 25% of the cash sum of your life cover policy if you're diagnosed, during the term of your policy, with one of the three critical illnesses covered that meets our definition, and survive for at least 10 days after.

Our Critical Illness Cover covers three of the most common* critical illnesses, including certain types of heart attacks, strokes and cancers. You can find out more information on the severity and type of conditions eligible in the definitions document and the Terms and Conditions. 

The simplest way is to click the 'Get a Quote' link on any of the Post Office Money Life Insurance pages.

You can buy Post Office Money Life Insurance online or over the phone, where you can choose to also apply for the Critical Illness Cover.

You won't be able to add Critical Illness Cover to your policy once it has started. You can ask to remove it if you need to, but you can’t reduce it.

Please read all the details of the policy before applying, including the Policy Summary and Terms and Conditions

No. The Critical Illness Cover amount is set at 25% of the life cover cash sum, up to a maximum of £125,000, when your policy starts.

For example, if you opted for £200,000 Post Office Money Life Insurance, your Critical Illness Cover would be £50,000.

It depends on the type of cover you choose.

For Level and Decreasing Cover, the Critical Illness Cover can pay out an extra cash sum equivalent to 25% of the life cover cash sum of your Post Office Money Life Insurance if you claim during your policy term. It won’t reduce.

For Increasing Cover, your Critical Illness Cover cash sum will increase 3% in line with your Post Office Money Life Insurance cover amount.

Here's what the Critical Illness Cover  cash sum could be for different types of cover at different points in the policy if the life cover cash sum was £100,000 and a claim was made at the start of the year.

Critical Illness Cover payable by year of claim

No. Once we’ve paid a claim for a critical illness your Critical Illness Cover will stop. However, the rest of your policy will continue and future monthly payments will reduce as you won’t be paying for your Critical Illness Cover. As long as you keep paying, your life cover cash sum will stay in place for the duration of your policy.

No. Your Critical Illness Cover is separate and not deducted from your life cover cash sum. Keep making your monthly payments and you'll still get 100% of your life cover cash sum if you die during the life of your policy.

No. You can only add the Critical Illness Covert when your first take out your policy. You can remove it later if needed, reducing the amount you pay each month, but you can't increase or reduce the Critical Illness Cover fit itself, which is fixed at 25% of the life cover cash sum.

You may be able to take out a further Post Office Money Life Insurance policy, which you could choose to add Critical Illness Cover to. Any new policy will be subject to the Terms and Conditions that are available at the time you apply.  

You can remove Critical Illness Cover from your Post Office Money Life Insurance but you cannot change the amount of Critical Illness Cover. If you cancel your Post Office Money Life Insurance, the Critical Illness Cover is also cancelled.

If you take out Post Office Money Life Insurance, with or without adding Critical Illness Cover, you won’t get a medical consultation.

The cash sum you receive from a Critical Illness Cover is currently tax free.

Even if you don't have a mortgage, life insurance could help your family cover the cost of everyday living and maintain their lifestyle. Things like rent, private or university education costs, birthdays, weddings. Even domestic tasks if whoever's left behind works and has to pay someone to do them after you're gone.

It's part of your estate so may affect the inheritance tax your family pays. By writing your policy in trust the insurance could be paid to them directly and never become part of your estate. That means no inheritance tax to pay. 

It is possible to write the policy under trust and we can supply a template trust deed. We only offer one template deed; a discretionary trust, which may not always be suitable. We'd suggest seeking advice before you complete it to ensure it is suitable for your circumstances.

Losing a loved one is a difficult time. The last thing those you leave behind need is a drawn out claims process. When the time comes, we'll make it easy for your personal representatives to claim the cash sum from your policy. 

If you've recently lost someone and need to claim, you can find all of the information you need here.

We'll need to know the policy number and details of the claim.

If you have written your policy under trust or you have assigned your policy to another person, we will pay the cash sum to the assignee or trustees.

The person making the claim must send all original documentation to us, showing they are entitled to receive the cash sum, before we will pay any cash sum to them.
This documentation must include any deed of assignment, trust deed, or deed altering the trust.

Full details of the claims procedure can be found in the Terms and Conditions, which will also be sent to you when your policy starts.

It's a service offered with Post Office Money Life Insurance at no extra cost that provides one-to-one, long term support from a dedicated personal nurse adviser during bereavement and serious illness. 

In these most difficult of times, an advisor from independent nursing service RedArc, will provide support if you lose someone, and to your immediate family if you pass away.

They'll also be there for you if you're diagnosed with a serious illness such as cancer, cardiac conditions, stroke or multiple sclerosis.

If it’s beneficial, a course of assessed therapy or counselling can also be provided. And you can use the service without ever having to claim on your policy.

This service, provided by RedArc is not part of the Post Office Money Life Insurance contract and can be withdrawn at any time.