Life insurance is essential for many people because of its simple purpose - to pay out a cash sum if you die or suffer a critical illness. Here are some quick-fire answers to the most common questions you likely have about life insurance…
1. Do insurance companies pay out when they should?
Yes – The vast majority – upwards of 90%* - of life insurance claims were paid in 2016 in the UK. Providing the terms of the plan are met, your insurance company will pay.
2. Would I have to pay income tax on a life insurance payouts?
No – Your family won’t have to pay income tax on a payout, but it may be subject to inheritance tax if the value of your estate (including your payout) is above the current £325,000 threshold*.
3. Can I insure myself and my partner on one plan?
Yes – Many couples decide to take out a joint life insurance plan as it is often the most cost-effective option.
4. Is there anything that could prevent an insurer from paying out?
Yes - there are a number of reasons a life insurance claim may be declined, including if a serious health issue was not mentioned at the time of taking out the plan (this is called non-disclosure).
5. Is the claim always paid as a lump sum?
No – Life insurance plans tend to pay out a cash lump sum, however it is dependent on your life insurance plan.
6. Does Zurich offer support beyond a financial payout?
Yes – Zurich offer access to professional counseling support for you and/or your immediate family.
7. Can I cover my children on my life plans?
Yes – It may be possible to add a child/children to your life insurance plan and take out critical illness cover for them. Before you take out a plan, please make sure you check the age limits for children.
8. Can I change my cover if my circumstances change?
Yes – Many insurers will allow you to increase cover under certain circumstances, such as becoming a parent; having another child; getting married; buying a home; increasing a mortgage.
9. Do I get any money back when the plan ends?
No – You won’t receive any money if the plan ends; you will simply stop making payments and will no longer be covered.
10. Is my life insurance plan protected?
Yes – Your life insurance plan is protected by the Financial Services Compensation Scheme (FSCS). See your life insurance plan details for more information.
If you’ve decided that you need life insurance, or would like to know more, visit our Zurich life insurance page.
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