Optional extras with Life Insurance

"There are three main optional extras. Waiver of Premium and Index Linking are quite straight forward, but do discuss Critical Illness cover with your Adviser at Moneyquest", says Charles Challiner spokesman for Lloyds Insurance Underwriting.

Optional Extras

The following three are the three most common optional extras: -

Critical Illness cover
Critical Illness cover provides you with a tax free lump sum if you are diagnosed with any of a long list of serious illnesses specified on your policy. Usually, the level of critical illness cover is the same as your life insurance but it doesn't have to be. Please note that a payout for a critical illness finishes the whole policy. It will not pay out again when you die.

Critical Illness Insurance can be costly but for most modern families, it is an important part of family protection.

Premium Protection (also called "Waiver of Premium")
With Premium Protection, if you were off work due to accident, illness or redundancy, the insurance company will pay your monthly premiums. Sometimes you have to be off work for a specified period of time before the premiums are paid for you - please ask your Adviser at Moneyquest to check it out.

Index Linking
Index Linking is a way of ensuring that the insured sum will increase in line with inflation. The purchasing power of your insured sum therefore remains constant.

If you take accept this option your monthly premiums will rise proportionately.

Please note that Index Linking is not relevant if you are insuring against a fixed financial liability such as a loan or mortgage. However, it should be considered if the policy is designed to provide money for your family in the event of your death.