An article, written by Kevin G. Hall | Knight Ridder Newspapers Wednesday June 13, 2007, – says almost 20 years ago, Brits changed how they calculated their retirement pensions as a strategy to adjust for inflation. The result of this action is Britain now has won the dubious honor of having the most complex pension system in the world. Unfortunately the changes made, in good faith, have not seen the projected increase in national savings, they haven’t fostered an “ownership citizenry and people are retiring more destitute that before the changes.
The Knight Ridder Newspapers information was shared purposely to set the stage for this article on reviewing your life cover. The following are a few tips to help you think about life protection as you near retirement and premiums fall.
1. Before you begin to gather information about life insurance coverage, take a look at the ratings given by major insurance rating services like Standards and Poors and AM Best. This ought to help narrow down your search for credible companies.
2. Any life cover you have had through your place of employment will end when you retire. So, it is critical, before you retire, that you purchase another life insurance policy to become effective on the day of your retirement.
3. The first thing you should do is to check with the human resource department of your company and find out the detail of your current coverage and what you can expect to happen when you retire.
4. If you have private life insurance cover too, it is time to ring up your agent to discuss the pending change in your life and see what your options will be. It may be that your premiums may be less.
5. Looking at cost is a factor to consider but, most UK companies try to keep their products different enough that pricing competition is reduced.
6. Give Term Life insurance some consideration as it is the most economical form of life cover and can be bought at competitive prices.
7. Don’t buy the first insurance package you find. It is important to compare packages for cost as well as coverage.
8. Check out discount life insurance brokers as they can usually come in with a lower premium than a regular life insurance brokerage firm because they do not take a commission.
9. If you smoke, stop, because your premiums will be 30-40% higher because of the health risk associated with smoking.
10. Do not purchase more coverage than you require.
11. Consider, if you want term and critical illness insurance cover, purchasing a combined policy can save you quite a bit of money.
12. Before you purchase insurance protection, carefully read the Key Facts document to check for this information:
a. Does the policy provide Guarantee premiums which stay fixed over the life of the policy?
b. Does the policy have Reviewable premiums which can be adjusted every five years and many times the change is dramatic?
c. Does the policy have a terminal illness benefit?
d. Does the policy allow that it can be written into a trust?
e. Does the policy allow for a waiver of premium benefit to be included?
13. Be sure to inquire about the claims history for the companies you are considering. When doing this, pay attention to their willingness to provide this information. What you are looking for is whether the companies are willing to pay claims or look for reasons to avoid payment.
The tips provided in this article are applicable to buying almost any kind of insurance in the UK. It is important you know what you want and that you shop around to find the insurer who can meet your needs at the most affordable price.