LIFE INSURANCE

To make a claim on a life insurance policy, you'll need to provide specific details, such as the deceased's name, policy number, and the cause of death as stated on the death certificate. It's also necessary to identify yourself and your relationship to the deceased.

Yes, there is no legal limits to how many life insurance policies you have, however more than one active policy can prove to be quite expensive.

There is never a 'best time' to get life insurance but it does get more expensive as you get older. The earlier you get it, the cheaper it will be for you.

Life insurance works by providing a financial pay-out to your chosen beneficiaries in the event of your death. This pay-out can be used to cover any debt, mortgage repayments or funeral costs. It is important to make your wishes for the pay-out known to your beneficiary.

Here's how it works:

1. Your purchase a policy: You can chose a type of policy that works the best for your circumstances and you can also chose the pay-out amount you would like for your beneficiaries.

2. You pay annual or monthly premiums: You need to keep on top of paying your premiums on time to maintain your policy.

3. In the event of your death: Your beneficiaries will receive the amount your specified (death benefit) after calling your insurer, providing them with your details, ideally including your policy number and a copy of your death certificate.

Choosing how much life insurance you need is a personal decision that is completely up to you.

A quick way to calculate how much life insurance you need is to multiply your annual salary by the number of years you think your family would need financial support. You might want to factor in future family expenses too such as university, weddings and deposits for your children’s first homes.

If you have any debts, including a mortgage, you may want to ensure your policy can pay it off, including any interest. Your pay-out should be enough to replace your income with a little extra to protect your loved ones against inflation.

The length of your policy is dependant on your needs. Life insurance is very personalised to each individual so how long you need your policy will reflect your age, current health and your dependants.

If your life insurance policy is set up by your employer, its likely to only last while you are employed within their organisation. If you leave that company, your policy will no longer be active.

Some employers offer what’s known as a death-in-service benefit to their employees, which will typically pay a lump sum of four times your salary to a named dependent. This type of policy is best seen as a complement to a life insurance policy, rather than a substitute as this cover is dependent on your job status.

There are many things that aren't covered in your life insurance policy and these can include:

• High risk activities

• Dangerous activities

• Lifestyle choices - If you pass away due to heavy drinking or dangerous drugs

• Incorrect information on your policy could render your claim invalid (e.g. you are a smoker but your policy says you aren't.

Be sure to be aware of what is specified in your policy.

Yes, as smoking is considered a health risk, if you are a smoker, you are likely to be charged a higher premium. If you quit smoking, you should inform your insurer and your premiums can be lowered over time.

It is important to be honest about your smoking status when applying for life insurance, as incorrect information can lead to a future claim being denied or your policy being voided.

Both life insurance and income protection offer financial support to your loved ones, but they are very different in terms of what they cover.  

Life insurance will pay out a lump sum if you pass away during the term of your policy. This will be paid to your loved ones and after a claim is made, the policy will end.  

Income protection will pay out a monthly benefit worth a percentage of your income if a medical problem prevents you from working. You can claim multiple times on your policy until you are well enough to return to work. Even when you have stopped claiming, your policy will still be active, and you can claim again if you need it. You can continue making claims on your policy until you choose to end it or until you retire.

It isn’t a legal requirement to have life insurance for a mortgage, but some mortgage lenders will ask you to take out appropriate cover. You don’t need to take out life cover from your lender – you can buy it elsewhere.

For more information read our do I need life insurance for a mortgage guide

If you have a decreasing-term policy and you have paid off your mortgage, your policy will still be valid and will continue to decrease the pay-out annually. If you have any other type of policy, they will usually still be valid after your pay off your mortgage.

You can expect a pay-out to anywhere from a few weeks to several months. It usually depends on several factors including: the type of claim, supporting documents submitted and the complexity of the claim. In complex or disputed claims, the pay-out may take longer.

Life insurance pay-outs are subject to inheritance tax, just like the rest of your estate. If your total estate is worth less than £325,000 (or £650,000 if you are married and leaving it all to your spouse), then your dependents won’t have to pay a penny in tax.

However, if your estate plus your life insurance policy are worth more than that in total, inheritance tax will be due on anything above that threshold at 40%. This means that if you leave a total of £400,000, the first £325,000 is tax-free. The rest - £75,000 – will be taxed at 40%, leaving £45,000.

Your family can avoid paying inheritance tax on your life insurance by writing your policy in trust.

Yes, you are able to cancel your policy at any time. After your 30 day cooling-off period it is unlikely you will get a refund for any premiums.

Yes, usually you will be able to extend the length of your policy however, this will often include a revaluation of your premiums, an assessment of your health and circumstances and will depend on the type of policy you currently hold.

Yes, there are a number of reasons why your life insurance claim can be refused included:

• Policy was inactive: If you have lapsed on any payments on the incident occurred outside the policy's coverage period.

• Incorrect information: Inaccurate or incorrect information on your policy can result in a void claim.

• Claim not covered: The incident doesn't comply with what's covered in your policy terms.

• Fraudulent claim: If your insurer suspects any fraudulent activity.

In the event that your claim is denied, your insurance should provide a clear explanation of why it was rejected. You should be able to appeal the decision if you want to refute that decision.

No, you're not too old for a life insurance policy. In fact, there are specific life insurance policies designed for older individuals.

These policies, often referred to as over 50s life insurance and are designed to provide a lump sum payment to your loved ones upon your death.

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