Wednesday, 23 January 2019
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What extra perks can I get from my life insurance?

Life insurance is traditionally about providing financially for your loved ones when you are gone.

But increasingly insurers are coming up with ways to get more people buying their products by making them useful to the still living too.

No-one should buy life insurance just because of the perks on offer. But if you are considering your options it is worth looking again at some of the more interesting and worthy additions to standard payouts on death.

Telegraph Money has pulled together some of the better add-ons in the market, though it is important to ask your insurer what they can offer you when you shop around.

The one for gym bunnies (or those who aspire to be)

Vitality is probably the leader in the life insurance perk market.  Its rewards scheme tries to motivate you towards a healthier life – good for them because it means they are less likely to pay out early before you have paid lots of premiums, good for you because you live longer and potentially pay less for your insurance.

An online health review will let you find out your Vitality age – based on a scientific calculator that assesses the impact of your lifestyle on your health. Use Vitality’s app via your smartphone or Apple watch to track your activity, and get up to 40pc off a range of devices designed for running and cycling.

Other deals include up to 50pc off Virgin Active or Nuffield Health gym membership fees, 50pc off a pair of running shoes at Sweatshop, and up to 50pc cashback on an Evans Cycles bike.

The aim is to earn Vitality points – and points mean prizes, such as a Starbucks drink or tickets to see the latest films at Cineworld or Vue.

Payouts before death

Less exciting but maybe just as useful are the extras that you can benefit from financially without having to die. Legal and General gives you accidental death benefit while it processes your application – so you are covered (to some extent) even before your policy is in place.

Terminal illness cover is another perk. This benefit means your policy could pay out a lump sum on diagnosis of a terminal illness, rather than on death, providing financial support at a time when it could be needed the most. Terminal illness cover could pay out the full amount of cover when life expectancy is less than 12 months. No terminal illness claim can be made after the death of the person insured.

Royal London offers serious illness benefit on its life insurance. There is an additional cost but it does mean you can get cover of up to £350,000 depending on your age if you have a heart attack or stroke, or develop cancer, dementia, a brain tumour or multiple sclerosis. If you pay the extra on your life cover for this, you get children’s benefit for free – which pays out up to £25,000 if your child becomes ill from one of the same six conditions.

Absolutely free cover for new parents

The Post Office offers a year’s free life cover of £15,000 for parents with children under the age of four. A cash lump sum is paid to your loved ones if you die in that time. The policy provides each parent with the cover on their own life per child, for up to eight children.

So, if you’ve three children under four and two parents take out a policy, you’ll get ÂŁ45,000 of cover each free for a year. And if two parents have the maximum eight children and each take out a policy, that’s ÂŁ120,000 of cover each.

Perks of the job

Check what your workplace offers in terms of life insurance as you may find it is generous. Death-in-service means your employer pays a tax-free lump sum if you die while employed with the company, to provide financial support for dependants (like their partner or children). Often it is calculated as a multiple of salary, so on a salary of ÂŁ40,000 with a “4-times salary” policy, your dependants would get ÂŁ160,000.

Workplace death-in-service will not normally require a medical to be undertaken, while some life insurance policies do.

However this cover may not financially secure everything you require after death. More comprehensive life insurance may, for example, pay off the balance of you mortgage in the event of your death, regardless of the amount outstanding. This is not the case with death-in-service benefits.

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Source: https://www.telegraph.co.uk/insurance/life/extra-perks-can-get-life-insurance/

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