Is the price I'm quotes the price I will pay ?

"If your income falls due to an accident, illness or you being made unemployed, you certainly don't want your life policy to lapse because you can't afford the premiums. In this context you should seriously consider the Waiver of Premium option", says Charles Challiner spokesman for Lloyds Insurance Underwriting.

What is Index linking?

With Index Linking your life insurance company automatically increases the value of your insurance cover annually in line with retail price inflation. This ensures that the day-to-day purchasing power of the insured sum is maintained.

The importance of this is simply demonstrated. Assume that price inflation runs at 2.5% per year over the full term of a 25-year policy with £100,000 cover. Without Index Linking, if the policyholder died in the last year that the policy was in force, the true purchasing value of the payout would be just £54.500.

However, with Index Linking, the insurance company would have been increasing the sum insured by 2.5% each year so that by the last year the insured sum would have been £180,873 - the £80,873 increase simply being the extra needed to offset the ravages of inflation.

Please note:
Index Linking is not necessary if you are using the life insurance to protect a liability which is unaffected by inflation such as a mortgage or other loan.