What UK Life Insurance Policy Makes Bonus Payments For No Claims?
While thinking about our own death is not a happy topic, it is necessary to consider how loved ones will carry on. It is understood that many people will be upset when we die, but there are also more practical matters to address. Family members may depend on our income, so they may have trouble paying bills after our death.
Financial issues make it even more difficult to deal with the death of a loved one. One way to ensure that beneficiaries are financially cared for is to purchase a life insurance policy.
It is not complicated to understand the purpose of life insurance, which is to pay a monetary benefit upon the death of the insured. Understanding and affording premiums may be more difficult.
Premiums are based on several factors, including age and health status, and they can be expensive. A whole life policy lasts for the insured’s lifetime, making it much more costly than a policy with a specified term.
Increasing costs of living and steady salaries have made it difficult for many UK residents to afford life insurance, particularly a whole life policy. The limited period of protection provided by term life insurance is an alternative for some. However, even this can be a financial burden, so anything the provider can do to assist with costs will make this cover more attractive.
Paying a Bonus for No Claim
Unfortunately, no UK life insurance providers currently offer this option. In the past, some life insurance policies rewarded the insured for living past the termination date of the cover.
Paying a bonus for not filing a claim provided a refund of a portion of premiums, making the cover more affordable. Sun Life Insurance, offered through AXA Wealth Ltd. was one of these policies.
Five coverage terms were available, and premiums were as low as £5 monthly. Applicants qualified by answering “no” to each of five questions for eligibility, some of which were health-related. If the applicant passed this inquiry and was between 18 and 59 years old, he or she was guaranteed acceptance.
An insured provided beneficiaries with a lump sum as high as £150,000 and was based on the selected premium amount and cover term.
During the decision-making process, the insured recognised that the value of this sum would decrease over time due to inflation. In addition, if the sum was paid to the deceased’s estate, inheritance tax might have been applied which decreased the value further.
The policy only paid a bonus if premiums were paid when due, and a claim was not filed because the insured lived past the termination date of the cover. In this situation, the insured would have received a refund of 15 percent of the premiums paid.
If any premium was not paid on time, the policy would have been terminated, and no refund was provided. This insurance policy did not carry a cash-in value.
Other Positive Features
This policy had two additional features that made it attractive. Premiums did not increase from the figure listed in the contract, and the premium was waived for the first month.
A benefit for terminal illness was included that paid the cash sum upon terminal illness diagnosis.
Being able to receive a bonus while having insurance cover in place was an attractive benefit for budget-minded UK consumers but, sadly, is no longer an option for those in the UK.
The ability to get some premiums back due to surviving past the policy’s termination date helped justify the cost of this cover.
An insured also received comfort in knowing that a sum would be paid if he or she received a terminal illness diagnosis during the cover period.