A Guide To Life Insurance - Further Term Assurances Example ....


Find Out More


Further Term Assurances Example...

John Brock took out a convertible term assurance over 15 years with a sum assured of £220,000 when he was aged 30 and in good health.

Ten years later he suffered a coronary thrombosis.

This meant that if he had had to take out a new policy in the ordinary way the company would have required a medical report and would have charged an increased premium for any policy he wanted. (It could even have refused to provide any further cover.

) For a 20-year with profit endowment this "loading" could have increased the annual premium for a £200,000 sum assured from £2550 to as high as £2700.

But by exercising his convertibility option, he is able to take out the policy at the normal premium rate.

There is usually a maximum age at which conversion can take place as well as a time limit within the term of the original contract itself.

The value of convertibility is greatest for the young married person who cannot now afford a with profit policy but would like to take one out when his or her earnings increase (possibly in connection with house purchase).

If one is sufficiently affluent to be able to afford both the protective life cover one needs and a long-term with profit policy, there is less benefit to be derived from conversion options. But the low cost of the option to convert makes it well worth having for many people, if only because of the eternal uncertainty of the future.

2015 - Guide To Life Insurance - Further reading ....

Other readers found these pages interesting


Read On: click here for Pure Protection Policies

While it is a reasonable exercise to compare pure protective insurance policies in relation to benefits provided per £2 of premium, things are not quite so simple with convertible term.
Here the performance of any future with profit policy into which one converts is also relevant.
The cheapest convertible term policy in terms of benefits per £2 of premium may be issued by an office which does not do very well in investment terms and thus produces lower maturity values........ see: click here for Pure Protection Policies


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

Giving power to the reader...

  • To contact us, send an email and we will get back to you as soon as we are able. If you are looking for independent life insurance quotations then click here. If you are looking for any of the folliowing: Car insurance
    Bike insurance, Travel insurance, Home insurance, Life insurance, Landlord insurance, Pet insurance, Medical insurance, Dental insurance, Business insurance please click here

  • Have something to say?
    We publish financial articles on this site if they fulfil our requirments. more>>