6 myths about life insurance

You might have heard people saying that insurance companies avoid paying claims, but this isn't the case. We're committed to supporting our customers and their loved ones during difficult times. And there are processes in place to make sure we handle valid claims fairly and efficiently.

You can take steps now to help any future claim be smooth and a stress-free process for your loved ones.

Here's how:

• When you apply for cover, answer the questions fully, truthfully and accurately. Not telling your insurer about something important when you apply could affect a future claim
  
• Make sure your loved ones know you have a life insurance plan, who the insurer is, the policy number, and the term of the policy. This will make it easier if they need to make a claim

Life insurance premiums are based on things like your age, any health conditions you have and if you smoke, so it could be more affordable than you might think. And the reassurance you get with life insurance, knowing that your loved ones are protected if you die, could be worth the cost.

Our cover starts from as little as £5 a month and you can cancel your policy at any time if it's no longer meeting your needs. You’re also free to amend your cover up and down if your needs change and you may be asked questions relating to health and lifestyle at the time. Just to note, this isn't the type of policy you can cash in, so you won't get any money back if you cancel it. If your premiums stop, your cover will end.

Aviva's life insurance allows you to take cover out between the ages of 18 and 77, and there are some life events that might make you feel like you need cover. For example, buying your first home, getting married or having a child. These are times when you may want to make sure that you’re looking after your dependants if anything were to happen to you. Also, it’s worth noting that the cost tends to rise as you get older, so it might be more cost-effective to have life insurance when you’re younger.

It's true that life insurance is usually designed to pay out when someone dies, though some policies offer more than that.

Our life cover, for example, includes a terminal illness benefit at no extra cost, so you and your loved ones can have the financial support you need. With this benefit, you'll get a lump sum pay out if you're diagnosed with a terminal illness during the policy term that meets our policy definition, and you're not expected to live for longer than 12 months. Once payment is made, your policy will end, and no further claims will be paid. 

If you're looking for another type of protection, you could also consider critical illness cover. This kind of insurance pays out a lump sum if you're diagnosed with, or undergo surgery, for a critical illness.

It's worth noting, there's no cash-in value at any time with either of these policies.

Some employers offer staff life cover as part of their benefits package, which is often called a death in service benefit. 

This typically pays out a lump sum of around four times your salary to whoever you've chosen to receive it – known as your nominated, or named, beneficiary – if you pass away. But terms will vary, depending on the employer. 

Death in service benefit can offer a worthwhile safety net if you pass away during employment but, depending on your own circumstances, you might still benefit from additional cover. Remember that employer benefits differ and, if you leave your current employer, you may lose the benefit.

While having children is an important reason for taking out life cover, it's by no means the only one. 

It's a good idea to have life insurance in place if you have a mortgage. Though it's not always compulsory, some mortgage providers will insist on it as part of the agreement.

If you have a partner and name them as a beneficiary in a will, or if your policy is in a Trust that they're named in, they could use the payout to cover bills, pay off a mortgage, and stay in the home, after you're gone. With a Trust, as well as choosing who benefits from the payout, it won't be counted as part of your estate. If you have a joint life insurance policy, when you pass away, the money will usually go to the surviving policyholder, unless you've made other arrangements.

If you don’t have someone who is directly dependent on you financially, and you have a single life insurance policy, then people who you have declared as important to you may ultimately benefit from the lump sum.

It’s perhaps less of a myth that life insurance terms can be hard to get to grips with, if they’re unfamiliar to you. That’s why we’ve created our life insurance glossary.