Frequently asked questions

A relevant life plan is a single-life term life insurance policy paid for by a UK employer for the benefit of an employee, including a director, and their family. It pays a tax-free lump sum on death or terminal illness during the term into a relevant life trust for chosen beneficiaries.

Premiums are usually paid by the company and a qualifying premium is generally not treated as a benefit in kind for the employee. Premiums may be a deductible business expense subject to the local inspector being satisfied they are wholly and exclusively for business purposes. The exact outcome depends on individual circumstances, so specific tax advice is sensible.

No. A relevant life plan is single-life only, so couples cannot share one and each director or employee has their own policy. If you want joint life cover, for example for mortgage protection, personal life insurance is usually the better fit.

Personal cover often makes more sense if you want joint life or whole-of-life cover, if the policy needs to continue beyond your current employment or the life of the company, if you are not employed by a UK limited company, or if you want the policy in your own name without involving the business.

Cover ends with employment. If the employee leaves the company, the policy may need to be assigned to the individual or it may end, and continuation options vary by insurer.

Critical illness cover pays a tax-free lump sum if you are diagnosed with a listed condition that meets the policy definition. Income protection pays a regular monthly amount if illness or injury stops you working, for as long as the claim continues, up to the policy limits.

Yes, and many UK households do. Critical illness cover provides a one-off lump sum to clear big debts and create breathing room, while income protection provides a monthly income to replace earnings during a long absence. You can size each policy to fit the underlying need.

Advisers often suggest looking at income protection first for households where the loss of earnings would be the bigger problem, then adding critical illness cover when budget allows. The right priority depends on your situation.

A short illness that does not match the critical illness list may not lead to a payout under critical illness cover, but it may still lead to an income protection claim, since income protection responds to inability to work rather than a specific diagnosis.

No. MoneyHelper notes that critical illness cover is not a substitute for life insurance, because it pays only if you survive the diagnosis and meet the policy definition.

Funeral cover is usually an over-50s whole-of-life insurance policy. You pay a fixed monthly premium and the policy pays a set cash lump sum to your family or estate when you die, which they can use towards funeral costs. The payout is a fixed amount rather than a promise to pay for the funeral itself.

There is no single price, because premiums depend mainly on your age and the cover amount you choose, not on a medical assessment. Older applicants and higher cover amounts mean higher monthly premiums. The only way to know your figure is to get a personalised quote.

No. Funeral cover is an insurance policy that pays a cash lump sum your family can spend as they see fit. A pre-paid funeral plan buys a specific funeral package in advance from a plan provider. Pre-paid funeral plans have been regulated by the Financial Conduct Authority since 29 July 2022.

Most over-50s plans have an initial qualifying period at the start, commonly one to two years, during which death from natural causes usually returns the premiums paid rather than the full sum. Accidental death is often covered from the start. After the qualifying period the full lump sum is normally payable whenever you die, as long as premiums are up to date.

It can give peace of mind and guaranteed acceptance with no medical questions, but it has trade-offs. If you live a long time you may pay in more than the policy pays out, the fixed sum may not keep pace with rising funeral costs, and cover lapses if you stop paying. It is worth comparing it against savings, standard life insurance and the government Funeral Expenses Payment.

Most UK policies are designed around new, acute conditions and often include specialist consultations after a GP referral, diagnostic tests such as MRI and CT scans, inpatient and day-patient treatment, and surgery in private facilities. Many also bundle in a virtual GP service.

Usually not, unless the insurer has specifically agreed to cover them. Underwriting at the start of the policy decides this, using either moratorium underwriting or full medical underwriting.

No. It is designed to work alongside the NHS rather than replace it. Accident and emergency care typically goes through the NHS, and after a GP referral you can use the policy for private specialist care.

Common exclusions include pre-existing conditions, ongoing management of chronic conditions, routine GP appointments, accident and emergency care, routine dental and optical care, pregnancy-related care, cosmetic and fertility treatment, and some mental health treatment unless added on.

Premiums depend on age, health, location, the hospital list you choose, your level of outpatient cover, and your chosen excess. A wider list of hospitals or unlimited outpatient cover usually means a higher premium, while a higher excess usually lowers it. Premiums normally rise as you get older.

Most mainstream UK income protection policies do cover mental health conditions, including depression, anxiety, and stress, when the inability to work meets the policy definition of incapacity. The trigger for payment is inability to work, not a specific diagnosis.

It can. Insurers underwrite at the start and may apply standard terms, a premium loading, an exclusion, a postponement, or a decline based on your individual medical history. Different insurers can take different views on the same history.

Yes. Insurers take a medical history at application and ask about diagnosis, treatment, medication, and time off work. Honest, full answers protect you, because non-disclosure can lead to claims being declined or policies being cancelled.

Look at the definition of incapacity, any personal exclusions in the offer letter or schedule, the claim duration, how linked claims are treated, and what rehabilitation or back-to-work support is offered. Own occupation is the most generous incapacity definition.

The insurer will normally ask for a claim form completed with your GP or specialist, request medical evidence, and pay the benefit after the deferred period if the claim meets the policy definition. They may check periodically during the claim and often support a phased return to work.

Statutory Sick Pay can be paid for up to 28 weeks for a single period of sickness. It is paid by the employer through normal payroll, the rate is set by the government, and for most people it is far below their normal take-home pay.

No. Sick pay is a short-term cushion, while income protection is a longer-term insurance designed to replace part of your income if you cannot work for an extended period. For many UK employees, income protection is what carries on once sick pay runs out.

Income protection usually has a waiting period, or deferred period, that lines up with the end of your sick pay. For example, if your employer pays full sick pay for six months, you might choose a 26-week deferred period so the policy starts paying as your sick pay ends.

No. Self-employed people do not get Statutory Sick Pay, which makes the gap larger. For the self-employed, income protection is often the main answer rather than a top-up, and a shorter deferred period set against personal savings can make sense.

It can. If you receive other income while on claim, such as continuing employer sick pay or some state benefits, the insurer may take this into account. The maximum benefit is also capped as a percentage of income.

There is no single monthly price, because every premium is calculated from your own age, health, smoking status and the cover you choose. A healthy younger non-smoker buying a modest amount of decreasing cover will usually pay much less than an older smoker buying a large level term policy. The only reliable figure is a personalised quote.

The main factors are your age, whether you smoke, your health and lifestyle, your family medical history and sometimes your job, plus the cover amount, the term length and the type of policy. MoneyHelper lists age, health, lifestyle, smoking, family medical history, occupation and the level of cover as the things that shape your premium.

Decreasing cover reduces over the term, so the insurer expects to pay out a smaller amount the longer the policy runs. Level term cover stays the same throughout, so the insurer carries a higher average risk and the premium is usually higher for the same starting sum assured.

Yes. Premiums are based partly on your age and health when you apply, so the older you are when you take out cover, the more it usually costs for the same policy. Locking cover in earlier, while you are younger and healthier, generally secures a lower price for the whole term.

Guaranteed premiums stay fixed for as long as you hold the policy, so the amount you pay never changes. Reviewable premiums are reassessed at set points, often every five years, and can rise. Guaranteed cover can cost a little more at the start but removes the risk of future increases.

A common UK approach is to add up your mortgage, other debts, the cost of raising any dependants, and a few years of replacement income, then subtract savings and any cover you already have. The result is a realistic target sum assured rather than a round number.

Around ten times your annual income is a common rule of thumb as a starting point, but it is only a guide. MoneyHelper notes the right amount depends on your circumstances and the people who depend on you.

It often makes sense to layer policies, such as decreasing term cover to track the mortgage and a separate level term policy for family protection. Splitting cover makes it easier to match each need with the right product and avoid paying for a single very large policy.

You can deduct cash savings earmarked for emergencies, employer death-in-service cover, existing personal life cover, and any pension death benefits payable as a lump sum. Check the small print, because employer benefits may end if you change job and pension benefits depend on scheme rules.

Reviewing cover after major life events, such as a new mortgage, a baby, or a pay change, helps keep the figure sensible. Cover is only useful if the sum assured still matches the real need.

The main ways are to compare the whole market rather than one insurer, buy the right amount of cover and term rather than an excessive one, consider decreasing cover, buy while you are younger and healthier, and stop smoking if you can. Cutting the premium by under-disclosing your health is not a saving, because it can stop the policy paying out.

A whole-of-market broker compares prices and product features across many insurers, which can find a better deal than checking one provider. MoneyHelper notes that brokers have specialist expertise and can match a policy to your needs while comparing prices, which can be especially useful if your circumstances are not straightforward.

Insurers usually class you as a non-smoker only after a sustained period free of all tobacco and nicotine, commonly around twelve months, but the exact definition varies between insurers and includes products like vapes and nicotine patches. Once you qualify, non-smoker rates are typically lower than smoker rates, so it is worth getting a fresh quote.

Where an insurer offers both, paying annually can sometimes work out slightly cheaper than paying monthly, because some monthly arrangements include a small charge for spreading the cost. Not all insurers price the two differently, so it is worth asking when you get a quote.

A joint life first death policy is often cheaper than two single policies, but it pays out only once and then ends. Two single policies cost more but can each pay out, stay in place if you separate, and let each person hold their own cover. The cheaper option is not always the better value for your situation.

Level term life insurance pays a fixed lump sum if you die during the policy term. Decreasing term life insurance pays a sum that gets smaller over time, usually broadly in line with a repayment mortgage balance.

For a given starting sum assured, decreasing term cover is normally cheaper than level term cover, because the insurer is on the hook for less money as the years go on. The exact difference depends on age, health, the term, and the insurer.

A repayment mortgage suits decreasing term cover, because the balance falls over time and the policy is designed to follow a similar curve. An interest-only mortgage suits level term cover, because the capital owed stays the same until the end of the term.

For family protection that is not tied to a debt, level term cover is usually a better fit. The cost of replacing your income or raising children does not reduce in a smooth straight line, so a falling sum assured may leave a gap later in the term.

No. Neither level term nor decreasing term pays out if you outlive the policy, and most term policies have no cash-in value. If you cancel or stop paying, the cover ends and there is no refund of premiums.

No. There is no UK law that says you must have life insurance to borrow money for a home, and the Financial Conduct Authority's mortgage rules do not require it. Most lenders recommend it, but they cannot make a mortgage offer conditional on you buying a specific policy.

No. It is a personal life insurance policy designed to pay a lump sum if you die during the term, with the cover sized to clear the mortgage. The payout goes to your estate or, if written in trust, to chosen beneficiaries, who can then choose to clear the mortgage.

A joint life first death policy pays once, on the first death during the term. Two single life policies pay if either person dies and can pay twice if both events happen during the term, and they continue separately if the relationship changes, which a joint policy does not.

The mortgage balance is the floor, not the ceiling. If only the mortgage is cleared, a surviving partner still needs to pay the bills and support children, so many households add level term cover for family protection on top of cover that tracks the mortgage.

If you set a cover term that is shorter than your new mortgage, the cover may end before the mortgage does. It is sensible to match the term to the mortgage term, or slightly longer if you may extend.

It means the policy is held under a legal arrangement for the benefit of chosen people, rather than simply forming part of your estate when you die. You choose trustees to look after the trust and beneficiaries who may receive the policy payout.

It can. Without a trust, a payout may go to your estate and be dealt with through probate, which can take time. With a trust, the payout is usually handled separately, although the exact timing still depends on the insurer, claim checks, trustees, and paperwork.

Not automatically. A trust may help keep a payout outside your estate, but the tax treatment depends on the policy, the trust type, when it was set up, the premiums, and your wider estate. It should be set up deliberately, with the right wording and expectations.

Trustees deal with the policy payout and follow the trust terms, so they should be people you trust to act carefully and practically. Common choices include a spouse or partner, adult children, close relatives, trusted friends, or professional trustees where the estate is complex.

Yes. A trust is a legal arrangement, so once a policy is placed into trust you may not be able to unwind it easily, and the trustees may control the payout rather than your estate. There can also be administrative work, so good records help.

Yes. Many UK insurers and advisers now send the health and lifestyle questions for you to complete yourself, usually as a secure link by email or text, so you can complete them in your own time rather than during a phone interview.

No. You are answering exactly the same questions a phone interviewer would ask. The difference is the setting, and the same answers produce the same underwriting decision however they are collected.

For most people, online is the easier option. You can look up a medication name or confirm a date before you answer, there is no appointment to arrange, and many people find it easier to give frank answers on sensitive topics when typing rather than speaking to a stranger.

Yes. Under the Consumer Insurance (Disclosure and Representations) Act 2012, you have a legal duty to take reasonable care not to make a misrepresentation, and that duty applies identically whether you answer by phone, online, or on paper. Careless or deliberate misrepresentation can lead to a claim being reduced or declined.

Sometimes. Depending on your answers, an insurer may follow up by phone, request a GP report with your consent, or arrange a medical screening for larger amounts of cover or certain histories. Most applications do not need a screening, and none of these mean something is wrong.

It varies. Many applications receive a decision quickly and cover can start soon after you accept the offer and set up the first premium, while applications referred to an underwriter or needing a GP report can take longer. No fixed timescale applies to every case.

An insurer may offer cover on standard terms, apply a premium loading, add an exclusion, postpone the decision, or decline the application. A different insurer may reach a different decision on the same medical history.

Yes. Under FCA rules, pure protection contracts such as life insurance come with a cancellation period of 30 days from the start of the policy or from when you receive your documents, whichever is later. You can cancel within that period and usually get any premium back.

Yes. You have a duty to take reasonable care not to make a misrepresentation, so if your health or circumstances change between applying and the policy starting, you should tell the insurer before cover begins.

Check the policy documents carefully, keep them somewhere safe, tell your family or beneficiaries the policy exists, and consider putting the policy in trust so any payout can reach the right people more quickly.

Life insurance applications ask about your personal details, height and weight, smoking and vaping, alcohol use, personal medical history, family medical history, your occupation and any hazardous hobbies, any tests or referrals you are waiting on, and any cover you already hold. The answers let the insurer decide whether to offer cover, at what price, and on what terms.

Insurers ask about conditions in close blood relatives, usually parents, brothers, and sisters, because some illnesses carry an inherited risk. They typically ask whether a relative was diagnosed before a certain age, such as 60 or 65. A family history does not automatically raise your premium or stop you getting cover.

It depends on the question. Some ask about a recent window such as the last 2 or 5 years, while others ask whether you have ever had a condition or symptom. Read each question carefully because the time window changes the correct answer.

If a mistake is careless or deliberate, the insurer can reduce or decline a claim or cancel the policy under the rules on misrepresentation. An honest mistake handled in good faith is treated more leniently. The safest approach is to check details before you answer and disclose anything you are unsure about.

Yes. If you are awaiting test results, a referral, or an investigation, you should disclose it even if you do not yet have a diagnosis. Pending tests are exactly the kind of detail insurers ask about, and leaving them out can affect a future claim.

UK insurers do not have automatic access to your GP records. They rely first on the answers you give in your application, and they can only obtain a report from your GP if you give explicit consent.

Most life insurance applications do not need a medical exam. A nurse screening or medical exam is usually only requested for certain medical disclosures or larger amounts of cover.

Yes. Under the Access to Medical Reports Act 1988 you can ask to see a report from your GP before it is sent to the insurer, and you can ask your GP to correct anything you believe is factually wrong.

At claim stage an insurer can, with your consent or that of your estate, request medical records to check the claim and confirm that what you disclosed at application was accurate. This is one reason accurate disclosure matters from the start.

Tell your insurer as soon as you realise. Honest mistakes are treated more leniently than careless or deliberate non-disclosure, and an insurer would rather correct the record before a claim than discover a gap afterwards.