Life Insurance

Life insurance provides financial security for your loved ones if you were to pass away. It provides a tax-free lump sum in the event of your death. Life is unpredictable but planning ahead can make all the difference for you and your loved ones.

If you would prefer to leave your home mortgage-free, clear all your debts upon death so as not to burden those you leave behind or wish to leave a lump sum to help cover costs when you're gone (from everyday bills, to childcare, university, weddings or house deposits), then you should consider taking life cover. If you are single with no dependents, then life cover is probably not for you.

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Even if you have life cover through your employer or Death in Service, you should always consider an external policy just in case you moved jobs or are made redundant and your new employer doesn't offer the same benefits or a later illness prohibits you from obtaining cover.

Some insurers will provide what's called a terminal illness benefit as part of their life insurance cover.

This means you can receive your life insurance pay out before you pass away if you're diagnosed with a terminal illness that meets the policy definition, and you're not expected to live longer than 12 months.

You need to consider whether you want level cover or decreasing cover. It's ok to have multiple policies that meet different needs e.g. a decreasing term policy for a repayment mortgage and a level-term policy for leaving behind a lump sum to cover university fees or support living costs.

Level Cover - You choose a lump sum that meets your needs, and how long you want your cover to run for. You will then pay the same amount each month until your policy ends. You might choose this option if you want to help cover interest only mortgage payments and other financial commitments. You can choose to make your cover amount increase in line with inflation. This means that your monthly payments may rise but ensures that the lump sum won't be worth less in the future because of the rise in the cost of living.

Decreasing Cover - The value of your cover goes down each month, but what you pay stays the same for the duration of the policy. This option is most suitable if you have a repayment mortgage.

That all depends on your needs and circumstances. If you have a mortgage, then you need a policy that covers your mortgage amount in full. Any additional cover will be based on your individual circumstances.

That all depends on how much cover you need. Cost is dictated by your age, smoker status, occupation, health status, how much cover you need and how long you need it for.

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Once your cover starts, you will need to pay by monthly direct debit to keep the policy active.

We only recommend policies that have guaranteed premiums. This means that the monthly cost is the same through the whole policy term.

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If you have a policy where the cover amount increases with inflation, then your premiums will also increase due to inflation but not due to any claims or changes to your health.​

A non-weighted premium is where the broker does not add any additional margin to the insurer’s price beyond the commission already paid by the provider. This means you are paying the insurer’s standard premium, with no extra uplift applied.

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At V Finances, we only use non-weighted premiums, as this ensures the best possible outcome for our clients. By not applying any additional charges, we can offer the same level of cover, with the same insurer and policy term, at a lower monthly cost than brokers who use weighted pricing.

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By contrast, a weighted premium includes an additional margin set by the broker, increasing the overall cost of the policy without enhancing the level of cover.

When you set up your life insurance policy, you should designate your beneficiaries (the people you want to receive the proceeds of the policy on your death). This helps to avoid arguments and ensure that the proceeds are distributed according to your wishes. You can choose as many beneficiaries as you want and specify the percentage you would like to leave to each one.

Whilst we are not qualified to give tax advice, one of the main ways that you can avoid probate and ensure that the proceeds of your life insurance are paid out quickly to the people you want to benefit from the policy is to put it in trust. Putting your life insurance in trust means that the proceeds of the policy are outside of your estate for inheritance tax purposes. You should always seek specialist advice regarding trusts and inheritance tax rules may change over time.

When you pass away, it is up to the beneficiaries of your policy to file a claim with the insurance company so that they can receive the death benefit. The insurer will require them to fill out a form as well as send a copy of the death certificate. The insurance company will need to assess the validity of the claim before they can pay out and they will sometimes require further information or documentation. Once a claim has been paid out, there will be no further premiums to pay to the insurer as the policy will have finished.

You will need to answer a medical questionnaire as the insurer needs to know what risk they are insuring and whether they can offer you terms. We will offer you the choice of going through the medical questionnaire with us or some insurers will let us send you a link to fill it out yourself.

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If you have any pre-existing conditions, it is worth having information to hand before applying for cover as the insurer may need to know dates of diagnosis/treatment, names of medication etc. You should also know your current height and weight.

We have over a quarter of a century of experience in giving tailored advice specific to your circumstances.

We have established relationships with insurers and can check any pre-existing conditions in advance of an application to ensure we find the best fit for you.

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We will look after all of the process from start to finish and keep you updated every step of the way.

We are regulated and authorised by the Financial Conduct Authority, so you get the same protection as if you were going direct to an insurer but with the added bonus that we search for the best deal across the insurers we use.