Life Insurance Plans

Sometimes the death benefit (or "life cover") provided by your Pension or through the Police Federation Group Scheme is not enough to meet your individual needs. We can provide competitive life Insurance plans that meet your requirements - either to repay your outstanding mortgage or provide financial support for your family in the event of your death. Peace of mind for you - just in case the unexpected happens.

These life Insurance policies are designed to repay the loan under a repayment or interest only mortgage if you (or your partner if covered) die during the term of the policy. The policies will usually pay out early on diagnosis of a terminal illness and there is the option to include critical illness cover - see Key Features - Questions and Answers 'when WILL the plans pay out?'.

Why do I need life cover?

Moving house is an obvious time to re-assess your needs and take out a plan, but it also makes sense to look around at other times. For instance, your needs might change if you re-mortgage or the size of your family increases, or if others are dependent upon your income.

Maybe you did not take out life cover when you first had your mortgage - but now consider it prudent to have some protection in place? Whilst it is generally preferable to effect cover when you are younger and in good health, peace of mind is always desirable.

Premiums for life Insurance have fallen in recent years. You could well find that you save money by replacing your current cover with a new plan, Obviously, you will need to be in good health if you want to do this.

Mortgage Protection or Level Term Plan?

Most mortgages are on a repayment basis where you pay off capital throughout the term - albeit quite slowly in the early years. The life cover on a Mortgage Protection Plan reduces each year so that it is sufficient to pay off your outstanding loan, but also so that you do not pay for more cover than you need.

Alternatively, if you have an "interest only" mortgage, or other need of life cover, you probably need a Level Term Plan. This means that the full sum insured is paid out in the event of your death at any time during the term of the plan. There is no payment if you survive - this too keep costs low.

The Level Term Insurance plan can provide life cover for any purpose - not only to protect an "interest only" mortgage.

What other choices do I have?

If you want two lives to be covered, you may be considering a combined "joint life" plan, which will pay out on first death to the survivor. However, you should bear in mind that if this happens the plan will then cease, leaving the survivor with no cover and with the cost of replacement being higher due to age or perhaps poorer health. You may be surprised to know that two separate "single life" plans will only cost you in total £1 per month more, but will effectively give you double the cover. You will then also be entitled to apply for critical illness cover (not available on a joint life policy), and may write the plans in Trust.

Critical Illness - if your plan is single life and the plan will expire before your 60th birthday, you can opt to have critical illness cover included in the plan. For more details and examples of the cost of this valuable additional cover, see Key Features - Questions and Answers 'How much do the plans cost?'.

Trusts - If your Mortgage Protection or Level Term Plan is Single Life you can write it in Trust, usually mitigating the effects of Inheritance Tax on the Death Benefit and ensuring a speedy payout to the beneficiaries named in the Trust Deed.

For full details please see the documents on the right.