When you complete an application for insurance you will be asked questions relating to the risk that you're asking the insurer to insure you against. That only makes good sense really, doesn't it? You will be asked to disclose any material fact that could affect the risk that you're asking the insurer to cover. This is based on the long-established principle of English law that the contract between insurer and insured is one based on the principle of something called uberrimae fidae, which is a Latin expression meaning "uttermost good faith", under which the insured must disclose to the insurer any matter that may possibly affect the risk of loss. Moreover, that obligation extends to all material information, whether asked for or not.

This puts the onus on you, as the insured person, to disclose to an insurer anything at all that could affect the risk you're asking him to insure against. Even more critically, any non-disclosure by you of any material information or fact can allow the insurer to declare the contract null and avoid in law. In that case, nothing is paid out in the event of a claim under the policy you thought you had.

Material facts

As you can readily appreciate, this principle has a pretty significant bearing on any life assurance policy you might want to take out. What are the "material facts" that might possibly affect the risk of you dying within the term of the proposed life cover? What are the material facts from your medical history or from your lifestyle choices? It's difficult, isn't it? Especially when you remember that the onus is on you to decide what is material, whether the insurer asks a specific question about it or not.

The question gets even more complicated when you're also thinking of taking out critical illness insurance. Just how much of your medical history and also how much of your lifestyle should you disclose? The insurer certainly won't go through the expense of scouring your medical records for you (though he will probably ask for access to those records should the need arise at some future date). The burden is on you and non-disclosure of anything that the insurer later determines to be non-disclosure of a material fact might be enough to enable him to reject a claim under the policy.

Five things to remember

Whenever you're completing a proposal for life insurance or critical illness cover, it may be helpful to pay particular attention to the main types of question which insurers themselves have complained that people too often fail to address. The following are the five principal conditions that insurance companies have identified as being insufficiently disclosed by people seeking life insurance or critical illness cover:

- Treatment (which will include tests and investigations) for multiple sclerosis, affected vision, numbness or disorientation;
- Any current medication or treatment (or tests and investigations which might lead to medication or treatment);
- Whether or not you are a smoker or drinker of alcohol and whether you have been advised to reduce your use of either tobacco or alcohol;
- Whether you have suffered any depressive illness; and
- Whether you have received any medical treatment at all during the past year.

If a claim is rejected because of a non-disclosure, the usual recourse of insurance companies is to return to the customer all premiums that have been paid and so put both the insurers and the customer in the same position as they were before the insurance policy was issued. This will be precious little comfort to you, the intended insured, however, because by then it will be too late.

Remember that:

- The onus of disclosure is on you, the policy holder;
- Material facts and information must be disclosed, whether or not the insurer specifically asks about them;
- Failure to disclose any material fact or information can invalidate the policy and lead to claims under it being rejected by the insurer.



Article Source: http://EzineArticles.com/?expert=Kate_Tee

Once you have a family or assume responsibility for another person's welfare, you need to think about life assurance. This doesn't just apply to people in employment, but to everyone in the position of 'head of the family'.

There are many different policies out there and you need to find one that suits all your requirements. So first you need to do the research. The first thing to consider is whether to go for one policy to cover all eventualities, or whether you would be better off with two or more policies to cover separate categories, which may be cheaper.

Next decision - do you figure it all out yourself or do you take advice from someone qualified to help. There are Independent Financial Advisors (IFAs) and brokers who can advise you and sell policies, although some brokers only deal with certain companies' products.

If you go it alone you can deal with an insurance company over the phone or via the internet, which is often the cheapest method. Brokers Online has a finance forum called 'Finance Talk' where you should get useful information about what cover you need to help you make your mind up.

The cost for any policy varies according to different factors, among them your sex, your age and smoking habits. The younger you are when you start a life policy the better as premiums are lower than for an older person. Women are usually charged less than men also.

One example shows a level-term policy for 100,000 pounds cover for a non-smoking 29-year old woman costing 8.07 pounds a month, and for a man 9.68 pounds. But let them age another ten years before taking out the policy and the woman pays 12.44 pounds and the man 15.55 pounds.

Smokers get hit in the wallet harder. Not only are the price of cigarettes prohibitive, but insurance premiums are higher as well. That's why you really need to shop around. At age 39 our example male smoker could pay 45.50 pounds a month for the same type of policy as mentioned above and that is a big increase. But another company could charge as little as 23.50 pounds, a saving of 22 pounds a month. Extrapolate that figure and you could be saving 264 pounds a year, or 6,600 pounds over 25 years - and that can pay for an awful lot of cancer-sticks!

The state of your health will have a bearing on the cost of your life insurance and you need to be upfront about any medical problems or risk a later claim being denied. If you have a particular condition cover may be harder to find but you should still be able to purchase a policy. A specialist broker that caters for people with health problems is The Insurance Surgery, so give them a call.

Another idea is to approach the charity associated with your condition for advice. Cancer sufferers can get information from Cancer Research UK, for example. A word of warning - be careful not to let any existing life cover lapse while you are looking around for a new policy.



Article Source: http://EzineArticles.com/?expert=Michael_Challiner

How long is a piece of string? It's a bit like asking how much life insurance you need. The answer can be almost any number and will depend on your own personal circumstances, the needs of your family and dependents, and, quite simply, how much you can afford in monthly life insurance premiums. No one size fits all.

Nevertheless, there are any number of online calculators, into which you key some basic details about yourself and your family, and which then help you to calculate a reasonably good ballpark figure. These calculators will also help to ensure that you don't overlook a particular element of expenditure that should be covered in your life insurance provision.

Mortgage - probably your biggest single current outgoing is your mortgage repayment. A mortgage is something you're unlikely to want your loved ones to have to assume in the event of your early death and you've probably already made some provision for it to be repaid in such an event. Most lenders are likely to have requested some form of life security on the loan in any case. But now is the time to check that you have sufficient cover against both capital and interest repayments on the mortgage.

Other loans - the same goes, of course, for other loans you may have taken out and which are not already covered by some form of life insurance. Once again, you are likely to want to ensure that your family is not left with large debts to pay off in the event of your death.

Childcare - if you have a young family, it's not just your role as a breadwinner that is going to be missed. You will want to consider all the many unpaid responsibilities you currently perform as a parent or guardian and whether alternative, additional childcare arrangements might need to be made in the event of your death. Just how much cover is likely to be needed and for what period of time, will of course depend on the number and ages of any children.

Education expenses - once again, you will probably want the peace of mind that your children will be able to continue at the same schools or be able to complete their university education in the event of your death. School fees and university expenses should therefore be included in your list of provisions to be made.

Income replacement - if you were no longer there as principal breadwinner, how much money would your dependents need to continue in the enjoyment of a lifestyle and standard of living that you want for them? This is the most difficult calculation of all, of course, since it involves taking your current salary and attempting to project into the future the family's likely needs. The most common "rule of thumb" in this instance is to provide a figure that is ten times your present salary. Depending on your personal circumstances, the number and ages of any of your children for instance and the way you envisage the proceeds being used, however, there may be an argument for increasing this provision up to 25 times your annual salary.

To work out how much life cover you need:

• Take into account all your current financial commitments and those you will continue to have in the future
• There is no hard and fast rule about the amount of money it is appropriate to leave behind, but there are a number of major headings of expenditure that you will probably want to take into account
• Remember that there are a number of online calculators that should help you to arrive at a ballpark figure for your likely needs and help you to ensure that none of the major headings of expenditure are overlooked.


Article Source: http://EzineArticles.com/?expert=Kate_Tee