Stephen Jines, Managing Director of investments at Cambridge based financial adviser AGT Independent Financial Services Ltd, counsels that it is very shortsighted of people not to have Life Insurance  cover and/or Critical Illness Cover as he insists that life has two potential risks – either being alive too long and passing away too soon.  “Its absolutely crucial to have some insurance in place – especially if you have got a young family,” he states. “In these uncertain times you need to build your own little stronghold because nobody else is can do it for you.”

Richard Hart at Moneynet says now is the ideal time to invest in such insurances as there are lots of very cheap premiums around due to to the fierce competition for business within the insurance industry. “The price of life cover has fallen – fallen about forty per cent in five years. It has never been as cheap,” he states. “The critical illness market paid out on 84 per cent of claims in 2004 – up from seventy eight per cent  the previous year.”

Be aware of what insurance cover you already have before you take out any more.  Do you already have investment policies or does your company pension fund give you any other cover?

The simplest way to estimate how much cover you require is to work out how much you would need to retain the same level of living over a year and then multiply it by 25 years.  The minimum amount needed should settle all debts and and leave a lump sum for your family.

Getting the best deals
When deciding on your policy it is very important to read the guide that many insurers have of the illnesses and conditions that they deal with. It will record everything and should be very clear and easy to understand.  You will also need to review the documentation of the crutial features of the cover which will take account of all exclusions and benefits.

When someone takes on the responsibility of a home loan they are usually counselled to take out critical illness insurance but should shop around and not just take the first insurance policy suggested. You need to consider a range of life insurance quotes.

If you start paying these insurances when you are young they are noticeably cheaper, very different to leaving it until you are older, when insurance cover goes up quite apppreciably.

Insurance premiums can also be lowered by giving up smoking.  Mary Lakes, head of protection at AxA Insurance says ” as well as giving a longer and healthier quality of life, giving up smoking can save people a vast amount of money.”

If you quit smoking you can take off as much as a 1/4 off  life insurance, critical illness  insurance and income protection insurance premiums because the evidence that we now have proves that smoking can instigate critical illness and exacerbates any other existing health conditions.

If your circumstances change you may have to alter your policy. Under no circumstances imagine that once you have bought your insurance policy that you can just continue with your life and dismiss it. Always be very aware of the insurance cover you have and be sure that, should your circumstances alter, or, is going to change your insurance must have capacity for these adjustments.  Clear examples are changing jobs, or do you intend to have more children; frequently think about everything that may raise your living costs and must be to be covered if you are unable to work.

The sale of life insurance policies is regulated by the Financial Services Authotity (FSA).

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Nothing is more harrowing in life than to be diagnosed with a serious or chronic condition. Matters are made much worse when your insurance company notify you that they won’t pay out on your critical illness policy or private medical policy for the HIV or cancer you are suffering from.

You are asked to read sub-clause four of paragraph 328 of the small print, which states that you are suffering from the the  wrong sort of cancer. Only tumours below the knee are covered and only the first five days of your treatment will be paid for, and then it is up to you to find the finance.

This situation may sound absurd, although brokers and insurance companies are regulated, this type of procedure continues to carry on. It has been a slow process to freshen up the industry and to make sure that consumers get a fair deal. That’s why you need mortgage insurance.

Just recently Cancer Backup, a registered charity, emphasizes this predicament by arranging a huge array of mystery shopping surveys, which brought to light some alarming facts about the private health insurance industry. It found that of all the leading insurers only HAS provided cover for cancer patients right through the length of their illness. Only immediate treatment is covered by most of the health insurance policies. Treatment or care over a prolonged period, such as hormone replacement or chemotherapy is not normally included.

Even though insurance companies and brokers want to finance long term cover for policyholders with chronic illnesses, they won’t always make it clear to would be clients, at the time of signing up what they are covered for. That’s why, when you are looking for quotes for mortgage cover, you need to be careful.

Although both  Cancer Backup and Macmillan Cancer support have been in discussions with similar organisations within the life insurance industry to raise the standard of sales practices and make the small print of policy documents much clearer, since the report was published two years ago, progress has been slow.

Critical illness cover and private medical insurance  is usually taken out by people who are comparatively fit and healthy. Getting cancer is the last thing to cross their mind. That is why it is imperative to specify an insurance policy’s exclusions before they sign.

A report of best practice for companies writing and selling medical insurance policies has been modified recently by the  ABI, which is a welcome step in the proper direction.

The trade body has now recommended that insurers and providers selling these forms of insurance should set up similar case studies, which explicates the conditions when a policy will or will not be paid. Sadly insurers no requirement to adhere to this code, which is voluntary.

While the  Association of British Insurers (ABI) initiative is to be appreciated, the best way of clarifying an insurance policy is by getting the salesperson to clearly explain the small print.

Then again, industry terminology is in spite of everything still being employed by insurers to bewilder the customer. For example it is wrong to categorize cancer as an acute or chronic illness, deliberates Cancer Backup. However insurance companies are definite that it should go in the chronic category. Consumers only learn about this when their claim has been rejected.

Although the ABI have got their responsibilities right, the insurance companies can only be required to better their standards by the regulator. Improved training of tele marketing staff, who sell the majority of the insurance policies, is also long overdue.

More thorough marketing procedures are crucial with jargon being removed. At the end of the day it falls upon the insurers insurance companies to make sure that their clients are fully aware of the terms of their insurance cover before they put pen to paper.

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