Life Insurance Cover Details

This is the section where you provide the information on the cover that you want to take out through your life insurance application.

If you have previously obtained a quote for a basic life insurance premium then the details for this section will be on the quotation.

You will be asked for the exact amount of life insurance cover that you are applying for, also known as the 'sum assured'. You will also need to provide the term that you wish the policy to be taken out for if it is a Life Term Assurance Policy. If you are applying for a form of Whole of Life Insurance Policy then this is irrelevant.

Also in this section you will be required to choose any additional benefits that may be available such as Critical Illness Cover or any other options that the insurer may offer. If this is Life Term Assurance Policy these could include an option to renew the policy at the end of the term or convert the policy to a different type of policy at the end of the term. These are clearly marked on the application form and if they are available it will be made clear when you obtain a quotation before completing your application. Options will be an additional cost to the basic life insurance premium.
Another common option is to one that will protect your premiums, in short the benefit will mean that the insurer covers your premium if you meet a certain criteria for becoming seriously ill or disabled for over a set amount of time. Please check with the insurer for further information on this option as they will all have their own specific definitions of illness and disablement.

For full and further information on Life Critical Illness Cover please click here.

Life Insurance Application

This section of the life insurance application form will also ask you at which frequency you would like to pay the premiums. This could be monthly, quarterly or annually in most cases.

You will also find that the insurer may ask you whether or not the policy is to be placed under 'trust'.

A trust is something that you must seek legal advice about before completing, the rules around trusts vary from country to country. In the UK a trust can be used on a life insurance policy to ensure that the proceeds are dealt with outside of the deceased's estate for tax purposes.

For example Mr and Mrs Reina take out a Life Term Insurance Policy with themselves as the policy holders and the lives assured. They set up a gift trust to work with the policy naming their two children as equal beneficiaries. The trustees are Mr and Mrs Reina and Mr Reina's brother. The objective of the trust comes into force when a claim arises through either or both of Mr and Mrs Reina dieing as a claim needs to be made. The trustees would make the claim on the policy whether this is the survivor of Mr and Mrs Reina and Mr Reina's brother or just Mr Reina's brother. The trustees are responsible for carrying out the intention of the trust and splitting the proceeds equally between Mr and Mrs Reina's two children.

As previously stated the above is only an example and it is a very simple scenario. Trusts can be a very complex issue and it is imperative that you speak to a legal advisor if you are thinking about having one set up to go with your insurance.

Disclaimer: The text on these pages is for your information only. It is not a substitute for professional legal or financial advice.