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26th March 2020

Guaranteed Insurability – does your policy offer this?

New Life and Critical Illness Applications

Submitting a life cover or critical illness application for anyone that has or is suffering from symptoms related to COVID-19 will almost certainly lead to a postponement of terms being offered. When you have no other (existing) over in place there is little that can be done. At least until you are given the all clear. However if you DO have some cover already in place we could check if any Guaranteed Insurability options are available for you.

What is Guaranteed Insurability?

Guaranteed Insurability means as an existing client you are able to increase cover with no further medical underwriting. This if a certain life event has occurred. This might well provide an opportunity for you to put additional cover in place without the need to disclose any medical issues.

What Life Events are covered?

There are various different life events for which insurers offer Guaranteed Insurability on life protection policies. In recent times a number of new options have been added by insurers. Most notably is Scottish Widows and Guardian who have extended their birth/adoption of a child option. This now includes becoming a legal guardian which currently no other insurer offers. Also, relatively new additions are the increase in inheritance tax liability by Guardian and Vitality. Also the rental increase option from Legal & General and LV=.

Check with us to find out which Insurers offer which options.

Life Cover for your Mortgage

In all cases insurers apply a limit to the increase that can be applied. This is usually the lower of a percentage of the original sum assured and a maximum monetary value. Generally, the maximum percentage the insurer will increase the sum assured by remains consistent across all event options. However there may be further stipulations. One example of this is where the client is increasing their cover due to an increase in their mortgage. In such scenarios insurers will add a further stipulation that the increase cannot be higher than the increase in mortgage liability.

Is This For You?

The reliance on a specific life event happening means that Guaranteed Insurability Options are not always going to be possible when we look to increase your cover. Where a life event has happened however, the ability to increase the sum assured without any further underwriting should be appealing. Especially now in the current COVID-19 environment. Where we know terms are unlikely to be offered at all if you have any symptoms of the virus.

Call us for help – these are difficult times and we want to make them easier to navigate through when we can!

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