In this section you'll find answers to some of the questions that our customers typically ask and some protection and insurance terminology explained.
Why is life insurance so important?
Generally, people take out life insurance because they wish to provide cover in the event of their death for their loved ones. This could be to pay off a mortgage or perhaps they are the sole breadwinner and wish to provide a fixed income or lump sum for their family and dependants.
Should I have insurance if I take out a mortgage?
It will be a condition of your mortgage loan agreement that you have a suitable building insurance policy in place to protect the structure of your home in the event of fire, vandalism, storm or flood as the property provides security against the outstanding debt.
Mortgages are a long-term commitment and you should also consider how you would maintain future mortgage payments should you suffer a loss of income or die. A life insurance, income protection or critical illness policy can provide valuable peace of mind and could prevent you from losing your home.
How much life insurance cover do I need?
The amount of cover, known as the sum insured, depends largely on your individual circumstances. For example, if you have a big mortgage and a large family, you will need more cover than someone who has a small home loan and one child.
You decide with your adviser how much you would like based on your individual needs and we’ll help you arrange the right policy for you.
We have created a helpful video "How to calculate your life cover requirements" to assist you.
How easy is it to apply for insurance?
Using our sophisticated technology system we will be able to compare insurance policies from a range of leading insurers and will only recommend policies that suit your needs and budget. If you decide to proceed, the personal details we have already obtained will be used to pre-populate the applications but we will need to ask some further questions regarding your medical history.
All applications are submitted electronically and in many cases we will get an underwriting decision back immediately. If the insurance company does require further information we will keep you fully informed to make the process as painless as possible.
What is the difference between life insurance and critical illness?
Whilst both policies provide a valuable benefit, life insurance benefits will only be paid on the death of the person or persons insured whereas critical illness policies will pay the benefit if you are diagnosed with one of the medical conditions specified in the policy.
How can I save money when buying life insurance?
Buy it now. Premiums for the same amount of coverage increase the older you become. The more you wait, the more you risk developing a health condition that could increase your premium, or disqualify you from coverage.
What type of life cover should I consider for a mortgage?
Life cover is an insurance policy which, in return for the regular payments, pays a lump sum on the death of the insured. It's often taken out with a mortgage to provide money for the loan to be repaid if the borrower dies during the term. There are two types of life cover: decreasing or level term. Decreasing term assurance is designed to protect a repayment mortgage. With decreasing cover the benefit amount goes down each month in line with the amount outstanding on the mortgage. This type of cover tends to be cheaper than level term assurance. With level term assurance, the premium and benefit remain the same throughout the term of the policy. This type of life insurance is ideal for where the mortgage balance remains the same over the mortgage term; for example, if you have an interest-only mortgage.
When should my cover start?
If your policy has been arranged in connection with a mortgage, cover should commence from the time you exchange contracts on the property purchase as from this date you are legally liable to proceed with the purchase.
If you are arranging family protection, we would recommend that you commence cover as soon as the insurance company have confirmed an underwriting decision as any change in your health could affect their decision and the premiums charged.
Can I insure my partner?
Many couples take out joint life insurance so they only have to deal with one set of documents. The premiums for joint life cover can also be cheaper than for two single life policies. However, it’s worth bearing in mind that joint life insurance pays out only once, on the first death. If the surviving partner then wants to arrange their own life cover, it will be more expensive as he or she will be older and possibly in a poorer state of health.
Can a family life policy pay out a regular income rather than a lump sum?
Yes. If you opt for family income benefit, your beneficiaries will receive a regular income on your death. It’s often easier to manage a regular income than a lump sum because you don’t need to worry about investing the money or any management fees. Premiums are also typically cheaper for a regular income policy because the longer you live, the less the insurer has to pay.
Will my family have to pay tax on any life insurance pay out?
The proceeds of any life insurance policy are currently free from income and capital gains tax, but they are potentially liable for inheritance tax (IHT). However, it’s easy to sidestep IHT by writing the life policy ‘in trust’. The proceeds will then go directly to the beneficiaries and will not form part of your estate when you die. Read more about our Policy trust service.
What factors generally drive insurance calculations?
Premium rates for life and health insurance are typically based on factors such as:
- Age, gender, height, and weight
- Health status, including whether or not you use tobacco or nicotine
- Participation in high-risk activities or occupations
What if I already have insurance cover?
Even if you already have a life insurance policy, it's a good idea to review it periodically to make sure it still meets your overall needs. There are times in life you need to take a look at your financial situation, such as if you:
- Were recently married or divorced
- Adopted a child (or became a grandparent)
- Changed/lost your job or salary
- Provide care or financial help to a child or elderly parent
- Received an inheritance
- Retired or your spouse has retired
- Started a business
If I cancel my current policy to replace it with a cheaper one, will I have to pay a penalty?
We would strongly recommend that you never cancel an existing policy without taking advice as in some cases a cheaper premium may lead to reduced cover and prevent you from making a claim. We would also recommend that you never cancel an existing policy until the new one has been underwritten and is in place.
For life, critical illness and income protection policies you will only be charged for the cover that has been provided. There are no cancellation fees, but for some buildings and contents policies cancellation fees may apply.
Do Term policies have a cash-in value?
No, term life insurance policies and all of the policies we arrange do not have a cash-in value. They are designed for your protection needs and do not have an investment component.
Remember your Blackstone adviser is on hand to provide advice based on your individual circumstances. Please contact us now for a free, no-obligation consultation.
As with all insurance policies, conditions and exclusions will apply.
This glossary is intended as a general aid to help you understand some of the commonly occurring phrases and jargon used in the insurance world. If you have any questions about the use or meaning of a term or expression, please contact us or your insurer.
Money paid by an insurer when a claim is accepted.
In a life insurance policy, the person(s) or entity named to receive the death benefit.
A person or firm that places its customers’ insurance with an insurer. A broker such as Blackstone Financial Solutions can advise customers on the best insurance product to take out depending on their needs.
Protects the structure of your home from events such as fire, vandalism, storm or flood. It's an essential part of your mortgage agreement to ensure that you have a minimum level of buildings insurance. Once you've exchanged contracts you're responsible for the property's building insurance.
COMBINED HOME INSURANCE
Means combining buildings and contents insurance into a single policy. This makes it simpler to manage, with one direct debit and only one insurer to deal with if you need to make a claim.
Protects the contents of your home, such as furniture, appliances, valuables and personal items against damage and theft. Personal possessions away from the home and legal cover are optional extras.
COOLING OFF PERIOD
A certain amount of time a customer has to cancel a policy without penalty.
CRITICAL ILLNESS COVER
Pays a lump sum on diagnosis of a specified critical illness during the term of the policy.
DECREASING TERM ASSURANCE
Life assurance for a fixed number of years however the cash lump sum payable decreases each year to reflect a decreasing mortgage balance. This form of life assurance is intended to ensure that a capital repayment mortgage is fully paid off if you die during the term. If the cash lump sum hasbeen paid by the end of the term, the plan ends and nothing is paid out. Commonly known as mortgage protection assurance.
This is the waiting time (agreed when the policy is taken out) before an income replacement policy starts to pay out. The longer the waiting period the less expensive the policy will be.
A combined life assurance and investment policy. Premiums are paid by the borrower to a life assurance company, usually monthly. The company invests some of the premium and this investment should grow to provide a lump sum at the end of the policy term (which can be used to repay all or part of the mortgage). The remainder of the premium is invested in a life assurance policy which will pay off the mortgage sooner if the borrower should die. Blackstone Financial Solutions only arrange non-investment protection policies however may be able to arrange an Endowment Mortgage which is an interest-only mortgage supported by an existing endowment policy.
Most insurance policies have exclusions - the things they don't cover. It's worth checking your policies for exclusions as they could affect any claims you make.
The amount you'll have to pay before your building or contents insurance policy kicks in to cover any claim you might make. For example, if your property is water damaged, you may have to pay the first £100 towards the claim. The amount varies so always check what the excess is before buying a policy. The cost of the insurance cover can be affected by the level of the excess.
FAMILY INCOME BENEFIT
These insurance policies pay a regular – and tax free – fixed monthly or annual income to your family if you die during the agreed term of the insurance. This policy pays an income (rather than a lump sum) for your family while your children are dependant on you.
Income protection insurance protects against loss of income in case of disability or extended illness. This type of insurance can be very important for the sole or primary wage earner in a household.
The policy defines how much will be paid, when the payments will begin and when they will cease. The longer the benefit period, the higher the premium will be.
A policy that covers two people and pays out when the first person dies.
LEVEL TERM ASSURANCE
Life insurance that pays out a fixed lump sum. You pay the agreed premium and the insurer in return agrees to pay a fixed, guaranteed lump sum if at any time you should die during the term of the insurance. Often used to protect an interest only mortgage or provide a lump sum to your dependants on death.
Medical history which can include details kept by general practitioners, hospitals and specialists.
To underwrite your policy the insurer will ask you to give details of your medical history. The insurer may write to your doctor for more information, but do not do so in every case. You must give all the information you are asked for, because if you don't, insurers may refuse to pay any claim that you make in the future, or may cancel your policy.
The amount you pay on a regular basis for an insurance policy.
A contract of insurance between you and the insurer.
The full terms and conditions that relate to a policy or plan.
This is an outline of the cover provided under a policy. It will show details of the policyholder and the cover you have.
Any disease, illness or injury for which you the customer has received medication, advice or treatment or has experienced symptoms.
PRIVATE MEDICAL INSURANCE (PMI)
Private medical insurance is designed to cover the costs of private medical treatment, for what are commonly known as 'acute conditions' that start after the policy begins.
TERMINAL ILLNESS BENEFIT
Not to be confused with Critical illness benefit, this benefit simply allows those who are diagnosed with less than 12 months to live to claim early on a life insurance policy. The benefit is often included with life cover at no extra cost.
The gap between what something is worth and what level of cover it has. This can be on any type of insurance policy, from contents insurance - where people don't realise the value of their possessions - to life assurance where someone underinsures the value placed on their life; for example if they were to die or become unable to work.
Whether it’s you, your family or your possessions, making sure everything is covered provides much-needed peace of mind.
UTMOST GOOD FAITH
The responsibility of the insured person and insured company to provide the correct information at all times. Applicants have a duty to disclose all medical and relevant facts at the time of application for the insurance and making a claim.
Talk to Blackstone about protecting your home, your family and your lifestyle.
Bespoke advice you can trust combined with the best financial practice and expertise is at the heart of the Blackstone experience. Call us now on 020 3770 2727 or request a call back to speak with an experienced adviser.
As with all insurance policies, conditions and exclusions will apply
Ask Us About
- No lender fees
- No early repayment charges
- Valuation fee refunds
We access the best mortgages from over 65 lenders and many exclusive deals not available directly.
Years of experience means our quality advice will be tailored completely to you.
The best service is personal service; we really care about your experience.
Our dedicated team are with you every step of the way.