Unpacking Real Life Cover
Article published on 5th August 2008
As discussed in our last article, insurer Fortis Life along with the independent protection adviser Lifesearch have developed a new form of all-inclusive protection policy that supposedly addresses the threats of the credit crunch and the UK's seeming of personal insurance.
Real Life Cover, as it is called, combines the following types of insurance into one grand policy:
- life insurance,
- limited critical illness cover that pays out a tax free lump sum every month if the policy holder is unable to work (covering heart attacks, cancers and strokes),
- cover if the policy holder has to give up work to care for a child or partner;
- recuperation cover
- unemployment cover too (which may be added).
The Guardian newspaper covered an interview with a policy adviser at Lifesearch, Matt Morris, who said:
"In an ideal world, everyone would have life insurance, income protection and critical illness cover but around 90% of people don't, partly because of cost, and partly because many people just think it's too complicated and they don't know where to start. With Real Life Cover, you pay once a month and get covered financially for just about anything that could stop you from working and earning a living."
Also reported in the Guardian, Jason Evans, a partner at independent financial adviser Kohn Cougar, has said:
"This is an innovative product but it is a bit of a scattergun approach. Not everyone needs all this different cover, and income protection should cover you up until retirement, not just for an overall eight-year period. This is why the Real Life Cover premiums are so low."
"There's no point paying a little bit for different areas of cover, if you don't need all of them. It might be better to stick to life insurance and income protection with full cover instead. I would strongly suggest someone seek advice to see whether this product really is suitable for their needs."
Source:
http://www.guardian.co.uk/money/2008/jul/13/lifeinsurance.reallifecover
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