A Guide To Life Insurance - Ensuring Better Value ....

 

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Ensuring Better Value...

The policy may be used as collateral to raise a loan; life insurance companies themselves will usually lend up to 85 - 90% of the surrender value to the policyholder, interest being paid only on the loan with the capital being repaid out of the maturity proceeds (or repayable earlier at the policyholder's option).

Or the policy may be made paid-up; this means that the policyholder stops paying premiums, and the company keeps the policy in force with a reduced sum assured (bonuses already earned would not be reduced). If in doubt shop around for a comparable quotation online.

The policy then continues to share in bonuses in the normal way (though a few companies still do not allow paid-up policies to earn any more bonuses). The disadvantage of the policy is its slow build-up in value, and for most young people, whose needs, say, 10 to 20 years ahead are uncertain, this is a considerable drawback.

Generally, therefore, whole-life is of more use and relevance to those in the higher age groups, who can use it for pure protection or investment, or both, and whose needs and incomes are more closely related to the cost and benefits provided.


2015 - Guide To Life Insurance - New for 2015 ....

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Read On: click here for The Versatile Endowment Policy


One unfortunate phenomenon in the life insurance business in recent years has been the sale of whole-life policies to young people by some advisers motivated solely by commission, which until 2006 was far higher on this type of policy than any other for the same amount of annual premium.
Non-profit whole-life policies are not, as such advisers sometimes claim, of any use whatsoever in obtaining a mortgage nor in providing for its repayment (taking out a non-profit whole-life policy may be........ see: click here for The Versatile Endowment Policy


Disclaimer

Our insurance website is an independent marketing website which acts as an introducer to 'whole of market' companies who offer specialist Independent Financial Advice. Each company is authorised and regulated by the Financial Services Authority.

 

We are not authorised to give advice and we are not liable for any financial advice provided by, or obtained through a third party. The information published on this website is for information purposes only. This site has been approved for compliance purposes by a Firm of Independent Financial Advisors who are authorised and regulated by the Financial Services Authority (FSA). The Chartered Insurance Institute

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