Life Insurance Eligibility: How You Can Get Covered

Life insurance, whether it’s for a self-employed individual or group life insurance, protects you, your family and potentially your employees and their families too. It’s a comprehensive plan which normally pays out a tax-free lump sum to the family or named beneficiaries of your life insurance plan. 

However, we find that customers often worry about their eligibility for life insurance, due to a range of misconceptions around criteria and payouts. The aim of this blog is to inform you as to how you can get covered on a life insurance plan, ensuring adequate protection and payout where necessary.

Life insurance eligibility criteria

There are some basic requirements you’ll need to meet in order to take out a life insurance plan in the UK:

• You must be a UK resident
• You must be at least 18 years old (and usually no older than 74, but this varies depending on the insurer, and we can help with this!)
• You must keep up with payments for your plan
• You must answer all questions truthfully

Beyond these criteria, there are some further factors which would be considered by an insurer before determining your eligibility. 

• For example, many policies would require you to take a medical exam, establishing your health and lifestyle before offering you a suitable plan. It’s important to be honest with insurance brokers during this process, as failure to do so could lead to increased risk of no-payout as a result of breaching policy.

Another important consideration which insurers often look for is what’s known as ‘insurable interest’. Effectively, this refers to whether or not you have a financial or personal relationship you have with the person whose life is being insured. Naturally, if you’re taking out a policy for yourself, the answer is yes. But, if taking out a plan for somebody else, you need to have a relationship with the individual where you’d be financially affected in the event of death. This could be an employee, spouse, or dependent.

Find Out if You Are Eligible for Life Insurance

Common misconceptions about qualifying for life insurance

Life insurance has possibly the highest number of misconceptions when compared with other insurance types. This leads to a lot of confusion, and we find that unravelling some of the following myths help many customers to realise how life insurance will benefit them:

• Life insurance is not for young people – Whilst you need to be 18 to get a life insurance policy, many young adults believe they don’t need life insurance because they don’t have financial dependents. In reality, life insurance is usually much cheaper for younger people, so it can actually make even more sense to take out a plan as a young person. 

• Insurers don’t pay out – Assuming your policy is active, and you haven’t breached your contract, insurers are required to pay out. As long as you provide accurate information during your application, you won’t need to worry about this misconception.
  
  To debunk this myth, here are some key statistics:

• Guardian Insurance paid 100% of their life claims
• Vitality Life paid out 99.7%
• Royal London paid out 98.7%

• Life insurance payouts are taxed – Payouts are actually exempt from income or capital gains tax. In some cases, your payout might fall under inheritance tax guidelines, but you can avoid this by placing your policy in trust. 

• Life insurance is only suitable for a main earner – Even if you’re not the top earner in your household, your death could still have a serious financial impact on the family. Especially for families with children, life insurance payouts can help to cover the cost of childcare in the worst case scenario. 

This is not an exhaustive list of all misconceptions around life insurance, so to find out more about life insurance plans, get in touch with the team at Dragonfly Cloud.

How to get covered for life insurance

There are a couple of ways to get covered for life insurance.

First of all, you can seek out a policy for yourself, contacting the major insurers and comparing deals to the best of your ability to find a plan which works.

Alternatively, you can go through an independent intermediary with a personal touch, who will listen to your wants and needs before giving you bespoke advice and searching a wide panel of insurers for the best deal for you. This option may cost you some money upfront, but gives a level of customer care you won’t find with a big insurance broker, and helps you to find a deal best suited to your needs, likely saving you money down the line.  

Learn more about Dragonfly Crowd, and learn how we deliver effective life insurance cover for businesses and individuals alike.  

Find out How We Can Help you Get Life Insurance

Life insurance through your business or employer

You might be concerned that you don’t qualify for life insurance. Perhaps you don’t have enough money to afford a comprehensive plan, or maybe one of the following applies to you:

• You have pre-existing health conditions or medical problems
• You engage in high-risk hobbies
• Your age means it’s too expensive
• You struggle with alcoholism or other addiction issues (more thorough medical underwriting process for individual plans might lead to denial)

Typically, group life insurance plans are underwritten less intensely, and are based on the group as a whole. What this means is that you may not have to undergo a medical exam, and you may be asked less questions about your health and lifestyle. As a result, you may qualify for a group life insurance policy, where you didn’t qualify for an individual policy. 

Individual life insurance policies often require you to undergo a medical exam, as well as asking you a plethora of questions which would uncover any issues or problems which might make you ineligible. As a result, ask your employer, or if you’re a business owner yourself, look into your options with Dragonfly Crowd. 

Our team, with over 50 years experience collectively, work alongside individuals and businesses alike to secure the best possible deals for our clients.