Life Insurance

You'll want to understand all the facts about Life Insurance before you take out your plan. So, we've put together some easy-to-follow frequently asked life insurance questions and answers:

What is Life Insurance?

It's a straightforward and affordable way of helping make sure that your family and loved ones are financially secure in the event of your death.

A Life Insurance plan pays out a cash lump sum if the person(s) insured dies during the term of the plan. The lump sum can be used to provide financial support to your family and loved ones, who might otherwise struggle to pay the mortgage, bills and other living expenses without your income.

Having the right level of Life Insurance in place gives you peace of mind and your family a financial safety net if they ever need it. There are different types of life insurance, so it's important to pick the right type for you.

What is Level Life Insurance?

It's a Life Insurance plan where the amount of life cover stays the same for the duration of the policy term. It could be the right sort of life insurance to choose if you want to provide a specific amount of money for your family and loved ones.

It's also suitable to cover an interest-only mortgage, where the outstanding mortgage loan remains the same for the term of the mortgage.

What is Decreasing Life Insurance?

It's a Life Insurance plan where the amount of life cover reduces during the plan term. It could be the right sort of life insurance to choose if you want to cover a repayment mortgage or other loan because, as the outstanding balance of the loan reduces, so does the amount of cover.

This means you only pay for the amount of cover you actually need.

Do you get any money back if you don't die by the end of the plan term?

No, your Life Insurance plan provides life cover only and there's no cash-in value at any time. At the end of your plan term, you stop making payments and your cover ends.

Who can apply for life cover?

You can apply for Life Insurance online if you're a UK resident aged between 18 and 66. A UK resident is defined as someone who's permanently resident in the United Kingdom of Great Britain and Northern Ireland (excluding the Channel Islands and the Isle of Man)

How much life cover should you get?

That depends on your personal circumstances. You'll want to take into account factors like:

• How much your family would need to support themselves without your income
• The size of your outstanding mortgage loan and how long it's got to run
• The amount needed to pay school and university fees
• Any other outstanding debts you have.

If you want help deciding on the amount, use our calculator to work out how much life cover you might need.

How long should you get cover for?

Most people want their Life Insurance plan to run until a key date in the future. For instance, it could be when you intend to retire, when your mortgage is paid off or when you think your children will become financially independent. Work back from that date and that will help you decide on the number of years you need to be insured for.

Can you start your cover now?

Yes. At Aviva, we're often able to give an immediate decision when you apply online. As long as your application is approved, we could start your cover straightaway.

Can you cover your mortgage?

If you've got an interest-only mortgage, your outstanding mortgage loan stays the same until you repay it all at the end of your mortgage term. Level Life Insurance might be suitable to cover this type of mortgage.

However, if you've got a repayment mortgage, Decreasing Life Insurance may be more appropriate because the amount of cover reduces during the term broadly in line with the decrease in your outstanding mortgage loan.

Compare the different types of life insurance.

Can you buy joint life cover?

Yes. You can have joint life cover that pays out if one of you dies during the plan term. Only one pay-out per plan can be made.

Is terminal illness cover included?

Yes, our Life Insurance cover includes terminal illness benefit. This means we pay the lump sum if you are diagnosed with a terminal illness and are not expected to live more than 12 months. This only applies if your plan has at least 18 months to run. If we pay the terminal illness benefit your plan will end and you won't get any further payment on death.

Is critical illness cover included?

No, critical Illness cover isn't available with these types of plans. However, we offer critical Illness cover with some of our other life insurance plans.

How can you pay?

You can pay your premiums only by monthly direct debit.

How do you make a claim?

If you or your family need to make a claim, you can be sure that we'll make the whole process as smooth as possible. If you've been diagnosed with a terminal illness, contact us and we'll help you fill in a claim form and contact your doctor for all the information we need.

In the event of your death, your family or representatives should call or write to us as soon as possible and we'll let them know what we need to sort out the claim.

Can you choose who gets the money if you die?

Yes. By putting your plan under trust, any life cover pay-out could go straight to the people you choose, quicker and with less fuss. Under current tax rules, it could also help protect the pay-out from inheritance tax.

Are pay-outs taxed?

Pay-outs for terminal illness and life claims are usually free of income and capital gains tax, but in some circumstances inheritance tax may be payable. You can normally help avoid this by putting your plan in trust. Bear in mind that the law relating to tax may change in the future.

Can you cancel the plan at any time?

Yes, just contact us if you want to cancel it. Once you cancel your direct debit payments, your cover will stop and you'll no longer be insured. Bear in mind, there is no cash-in value at any time.

Will your payments change?

No, for Level and Decreasing Life Insurance we guarantee that your monthly payments will stay the same for the duration of your plan. For Decreasing Life Insurance, premiums are set at the start of the plan to take into account the decreasing amount of cover you'll need during the plan term. This means the premiums are often cheaper than other types of life insurance.

It's easy to apply for Life Insurance online

You can get an instant quote and apply online. We'll get back to you straight away with an instant decision. Or call us on 0800 068 5549*

Whether you'd like more information, a quote or a helping hand with your application, just give us a call.

* Lines are open Monday to Friday 8am - 9pm, Saturday 9am - 5pm and Sunday 10am - 4pm. Calls may be recorded and/or monitored.

WC05065 03/2012