FAQ’s

FAQs

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Is my data safe?

100% safe and secure. We only work with advisers and brokers who are directly authorised by the Financial Conduct Authority. We will never pass your details to anyone else.

Is this service free?

Yes, completely free to use.

Why should I compare?

High street banks and insurers spend lots of money on TV and newspaper advertising to encourage you to buy products just from them. Only by comparing all of them together can you see who has the deal that’s best for you.

Am I under any obligation to buy the product you suggest?

None whatsoever. Our partners will present you with a range of options but at the end of the day, the decision is yours.

Can I request to be called at certain time?

Yes absolutely, you can select a call time and date during the application process.

What is Life Insurance?

Life insurance, in its basic form, is an insurance policy that will pay a chosen amount of money in the event of the death of the policy holder. Many people take life insurance cover out to provide funds for loved ones or to pay off a mortgage or other debts after their death.

Do I need life insurance?

It really depends on your circumstances. An average single person with no dependants probably has little need for insurance. The main income earner in a family with children or other dependents definitely will need it! Life insurance is always a difficult subject to talk about, nobody wants to talk about their own mortality, but imagine how your loved ones will cope financially if you are no longer around to support them.

How much cover do I need?

This is the most common question we receive but it is not an easy one to answer because it depends entirely on your own circumstances. A couple purchasing their first property together might want a policy to pay off the mortgage in the event that one of them passed away. Another couple with a larger mortgage and a couple of dependents may also want cover to pay off the mortgage, but on top of this they may want funds to help pay for raising children or a lump sum for the surviving spouse/partner.

I’m not at work. Can I still get life insurance?

Yes absolutely. There are no restrictions on taking out life insurance, even if you are not currently working. Before you can take out life insurance there are eligibility and affordability questions that will check that you are getting the right and most affordable cover for you, and you will also be asked for the reason why you wish to take out cover, but these questions apply whether you are working or not.

What is the difference between a fee and no-fee policies?

With a fee policy you pay a one-off £25 and get the cheapest possible premium available to you. If you choose a no-fee option then no fee will be payable and we receive little in the way of commission.

Why are your premiums lower than other comparison websites?

Comparison websites can take a large chunk of premiums paid as a commission fee when you use them, which can lead to higher costs for you.

Can I get a cheaper premium by applying directly with the provider?

No. If you apply directly with a provider they tend to provide no discount and keep all commission. This often makes it the most expensive way to buy life insurance.

Are your policies the same as those purchased directly from the provider?

Yes, exactly the same. In fact, policies are the same whether purchased directly from a company, via a financial adviser, or from a broker like us.

When will my policy start?

This depends on the details you give us when you apply. If your application is accepted immediately then you can start benefitting from your policy straight away, but it is also possible to defer the start time to any date within the next 30 days. It is possible that the insurance company may require further information regarding a medical condition and will write to your GP. If they do this it can cause a delay as GP’s take an average of two weeks to reply to insurance company requests. Please be aware that if a request is made to your GP then you may be asked to cover any fees involved with that request.

Can I put my policy in trust? What does this mean?

Yes, you can put any life insurance policy in trust at no additional cost. To find out more about this option please head over to the trusts section of our website.

What happens if my application is declined or my premium is increased?

Sometimes an application cannot be accepted on the standard terms available by the insurer. This can be due to many factors, including health or lifestyle issues. In the event of being declined insurance, we will offer a full refund of upfront fees, or offer the opportunity to apply with another insurer. If this subsequent application is also unsuccessful your fee will be refunded.

What happens if I stop paying my premiums?

If you do not pay your premiums the policy will lapse and you will no longer be covered. This doesn’t happen immediately but after a set time period just in case you have accidentally cancel your direct debit or changed your bank account. In this period we will contact you for new details to keep your cover running. If we receive no response then the policy will be cancelled.

Can I increase my cover or change the term of a policy after it has started?

In most cases you cannot make changes to a policy once it has started. Some insurers let you increase your cover after certain specific events, such as if you move to a new property and increase your mortgage, the insurance company may allow you to increase your cover to ensure that you are still adequately covered. If you wish to make a change to your policy please contact us.

Do you give advice?

Moneyworld do not provide financial advice. However, we do work in partnership with Vita, an independent whole of market insurance broker, that do offer advice. Vita share our values and do not believe in hard sell or pushy sales advisers, just fair and honest advice.

If you would like advice on any aspect of life insurance cover then please head over to our advice page and complete the call back request form or call the number provided to speak to an adviser.

Tax rules for life insurance claims

Under current tax rules, life insurance pay-outs are usually free of personal liability for income tax and capital gains tax. However, do be aware that in some circumstances your pay-out may be subject to inheritance tax. You can normally mitigate this by putting your plan in trust. Bear in mind that taxation laws are subject to change and the advice we give now may not be valid in the future.

Is my policy protected by the Financial Services Compensation Scheme?

Yes it is. Regardless of who you choose as your insurer, your cover is protected by the government’s compensation scheme. For full details of the FSCS scheme please see our terms & conditions.

What will I be covered for?

Life insurance policies are designed to pay out upon the death of the policy holder. However, there are situations where a life insurance policy will not pay out. Details of what is and isn’t covered in your policy will be set out in the specific terms and conditions of your plan.

Most life insurance policies are designed to cover the policy holder for a specific period of time. If you die within this timeframe, your policy will pay out in-line with its guidelines. This type of insurance is known as “term life insurance” because it pays out whilst the policy is still in its valid term.

Life insurance that pays out regardless of the timing of the policy holder’s death is known as “life assurance” as a pay-out is assured regardless of the timing of your death.

Should I consider life insurance?

Life insurance can be a very important consideration for most people as they try to ensure that they provide financial security for their loved ones in the event of their own death. It can be a great way to ensure that you leave minimal or no debts for your family and can be used to cover things like outstanding mortgage or loan balances. Life insurance can also be used to pay for your funeral expenses and help your family cover their everyday expenses going forward.

In some cases, life insurance may not be a worthwhile investment. If you have no financial dependents and are single, the cost of a policy could be unnecessary as it will yield very little benefit for you in the long term. Equally, if your children are of an age where they can provide for themselves financially there may be no real need for life insurance cover.

Do employers offer life insurance?

There are many employers who offer something called death-in-service benefit. Death-in-service is usually a lump sum payment that will be paid to your family by your employer in the event of your death, so long as you are employed by the company. This benefit usually will equal roughly four times your yearly salary and may be enough to help your family with the immediate financial burden of your death. For many it may also be prudent to take out extra cover depending on your circumstances.

How does term life insurance work?

Term life insurance is the most common form of life insurance and for most people is the most affordable option. This form of life insurance will cover you for a set period of time, called the term. For example, if you choose a 20 year term, then you will be covered for a period of 20 years. If you were to die in this time, your family would receive a pay out in line with the policy’s terms and conditions. Once the agreed term has finished, your cover will expire and your beneficiaries will not receive a pay-out in the event of your death.

How do pay-outs change over time?

The answer to this question depends on the type of insurance policy that you take out. If you take out a level term policy, the amount that you receive will stay the same regardless of when you die so long as you die within the term of the policy.

It is possible to take out a decreasing term life insurance policy, which gives lower pay outs the longer the policy runs. For example, if you were to die in the first year of your policy, your beneficiaries would receive the maximum pay-out, but if you were to pass away in the last year of your policy, the sum received would be reduced in line with the terms of the policy. This type of policy is ideal for covering outstanding debts, like mortgages and loans etc, that you expect to reduce over time.

How long should I get cover for?

This depends purely on your own personal circumstances. Some people choose a term that will provide cover until their children are 18 and are in a position to become financially independent. Others choose policies that will cover them until their children have completed university. It really comes down to what you want to get out of your life insurance policy. Age will also play a big factor in how long you get the policy for but bear in mind that the older you are the more expensive the policy will be.

What do I do if I want a pay-out to be guaranteed?

Some insurance plans will pay-out regardless of the timing of the policy holder’s death. These policies are called whole of life assurance policies and they ensure that any pay-out your family receives will not be dependent on the timing of your death. Whole of life assurance policies tend to have far higher premiums due to the extra cover they provide.

Will my life insurance premiums change throughout the policy?

The vast majority of life insurance plans offer “guaranteed” premiums, where the amount you pay is fixed throughout the entirety of the plan and there will be no sudden price increases. It is important to note that some policy’s do not offer “guaranteed premiums” and it is vital that you read all terms and conditions before signing up.

Some life insurance plans have “reviewable” premiums, where the cost of the policy is reviewed periodically. These “reviews” can result in a price increase due to the policy holder’s increase in age.

Whole of life assurance policies may have different payable premiums throughout the policy, because they are usually tied to an investment. If this investment isn’t doing well, the cost of your premiums can go up.

How much should I expect to pay for life insurance?

The cost of life insurance varies depending on the type of plan and how much the pay-out will be in the event of your death. As with all forms of insurance, providers are essentially betting against you making a claim and if you are viewed as a high risk customer, the cost of premiums are likely to be more than if you are viewed as a low risk customer. If you are in great physical shape and lead a healthy lifestyle, then it is only understandable that you will pay lower premiums than somebody who is overweight and a smoker. Age is also a big factor when deciding upon the cost of your plan. As a general rule the older you are, the more expensive the plan will be. However, there are other factors that are taken into account and it is important to read all a policy’s terms and conditions before agreeing to take it out.

Can I get life insurance if I am already ill?

It can be difficult to get life insurance if you already have been diagnosed with a serious medical condition as many insurance companies are reluctant to give policies to people with pre-existing illnesses. There are however some companies that will allow you to take out an insurance policy at a higher premium, or give life insurance cover which excludes the pre-existing condition. In the case of the latter, you will be covered if you die from any other cause unrelated to the medical condition. You should check with the insurance companies directly to find out exactly what their policies cover to ensure that any potential plan is relevant to you before you sign up to it.

How does age affect life insurance prices?

As mentioned previously, the general rule for premiums is that the older you become the more expensive your premium will be. The reason being that the older you are the shorter your life expectancy is and the greater the likelihood that you will pass away whilst covered by the plan will be. There are, however, many insurers that will provide cover for people over 50 even without a medical.

However, age is not the only criteria insurance companies take into account, and they will look at things like your general health and lifestyle, whether you are a smoker or not, and what your medical history is. If you are older and looking for a more affordable policy, it is important that you think about anything that may increase your premiums and take measures to remove them from your lifestyle.

What if I want to insure my partner too?

It is common these days for couples to take out joint life insurance policies that offer shared protection between partners. The benefits of these policies are that they are generally less complicated and they can be considerably cheaper than separate policies as the insurance company are getting two customers instead of one and will discount accordingly. When considering one of these policies, it is important to remember that they tend to work on a first death basis where the policy will only pay-out when the first policy holder dies. This will leave the second policy holder without cover and facing the prospect of higher premiums in order to take out a new policy due to their increased age.

Do my family need to pay tax on the pay-out?

Any pay-out received as the result of life insurance cover will not be taxed by capital gains or income tax. However, there is a chance that it may fall under inheritance tax in some situations. This can be easily avoided if you put your policy “in trust”. Putting a policy “in trust” allows the pay-out to go directly to your dependents without being affected by inheritance tax.

Is the money always paid as a lump sum?

You can generally choose how benefits from a life insurance policy are received in the event of your death. Some plans offer lump sums, where your beneficiaries will receive the entire payment at once. Others allow your beneficiaries to receive the pay-out in the form of an income they receive at regular intervals. This option may make it easier for them to budget going forward on an ongoing basis.