The idea of insuring a home or car is familiar; but, for many of us, Life Insurance isn’t so straightforward. For example, it’s a common misconception that Life Insurance is simply a great way to protect your mortgage – but it can be so much more than this. In fact, the right policy will provide affordable financial protection for both you and your family.
At Cherry Godfrey, our friendly advisers are here to help with any questions you may have. To that end, we’ve sat down with Alastair Gillespie, an experienced mortgage and life adviser in the Isle of Man, to run through some of our top Life Insurance ‘FAQs’!
Great to talk with you, Alastair. Could you tell us a little bit about your background and role at Cherry Godfrey?
My name is Alastair Gillespie, and I am a mortgage and life adviser at Cherry Godfrey in the Isle of Man. I have worked in the life insurance industry – for a number of different companies - since 1980.
I help clients get a mortgage, as well as providing advice on anything and everything to do with life insurance (including critical illness cover and income protection cover).
That’s great to hear! Now, onto the ‘FAQs’. What are the first questions customers should ask when buying life insurance?
It sounds obvious, but price is usually the main thing! You want to be sure you’re getting the best cover for the best price. It’s also important to ask questions around how exactly it all works, because not every policy is the same.
Do I have to be a certain age in order to apply for life insurance?
Yes. Normally you would need to be 18, though there is one company that offers policies for those aged 17 and above.
Are there any instances in which an insurer wouldn’t pay out?
Yes. Failure to truthfully disclose correct health details is one example, or perhaps non-payment of premiums (this would mean the policy would lapse and cover would cease).
Would I have to pay income tax on life insurance?
No. Proceeds of life insurance are tax free.
Can children and other dependants be added to a life insurance policy?
No. As mentioned earlier, you’re not eligible for life insurance until you reach a certain age. However there are certain aspects of certain policies that cover children (such as critical illness cover – which we’ll get onto later).
Are there any other extras I can add to my life insurance policy?
Yes! Things like Global Treatment and Fracture Cover spring to mind. You can also upgrade your critical illness cover to include children’s critical illness cover. This would be up to a certain percentage of the sum insured, and depends on the company.
Can I place my life insurance policy in a trust?
Yes.
How easy is it to change a life insurance policy once cover has started?
It’s not difficult to change a policy during the term, but there would need to be a reason – a specific event, for instance. Examples include: moving home and having a bigger, or much smaller, mortgage; getting married or forming a civil partnership; becoming a parent, or having more children; getting a salary increase; or getting divorced or dissolving a civil partnership.
If you’re thinking how best to protect your family against unforeseen circumstances, Life Insurance could be a great choice for you. Get in touch today for a no-obligation discussion if you’d like to explore the available options; our personable team are waiting to help!
