Which Life Insurance Is The Best?

Life insurance advice

If you’ve read any of my other articles on Life Insurance, you’ll have a pretty good idea of who provides it, and why it’s a good idea to have it – especially if you are the main earner in your household and have children who are financially dependent on you. But with so many insurers out there it can be difficult to determine which insurer is the best. In this article I’m going to be having a more in-depth look at the policies of 3 insurers that I think are the best around. The statistical information within this article is factually correct – whether or not they are the best is simply my professional opinion. Remember that before you take out any kind of insurance policy, I always recommend you speak to an independent financial advisor. So…

If you have a family who would struggle to pay the bills and mortgage in the event that you were to die, then Life Insurance is, in my opinion, essential. It means that your spouse, children, and loved ones won’t be left with the extra stress of being faced with debts and bills that they are unable to cover without your income. There are plenty of insurers out there offering Life Insurance policies, but there are three companies that stand out to me as offering the most comprehensive coverage; AIG, Legal & General, and Aviva. Let’s take a look at what makes these insurance giants stand out above all the rest:

As with other Life Insurance policies you can choose the amount of cover you need and how long you need it for, with that being fixed unless you change your policy. You can take a policy out in just your name, or under joint names, and can pay your premiums monthly or annually. All three companies offer Decreasing Life Insurance, which is designed to help protect a repayment mortgage. And Finally, all three offers ‘Terminal Illness’ cover for free as well as ‘Waiver of Premium’, ‘Total Permanent Disability’ and ‘Guaranteed Insure Ability’ as extra’s / inclusions.

So, I wanted to focus on some of their more important aspects.

AIG

AIG, or, ‘American International Group’ to give them their full name, are a global insurance company that was first established in 1919 and operates in over 80 countries, including the UK. AIG specialises in UK business insurance and has done so for over 60 years. They also provide a range of insurance products and services such as, you guessed it – Life Insurance.

How good is their cover?

AIG offers five different options when it comes to Life Insurance:

  • Term Insurance – A policy that is fixed for a set period of time (a ‘term’) that covers you against death and terminal illness up until the last day of that term. Money is paid to your family (as an example) as a tax-free lump sum if you die
  • Life Start – Again, you are covered exactly the same as with Term Insurance, but the premiums are kept lower at the beginning than with the standard cover, and increase over time. You do have the option not to accept an increase in your monthly premiums, but the amount you would be paid out if your family had to make a claim will reflect this
  • Instant Life Insurance – This type of policy requires you to answer fewer questions to get covered, and you can complete an online application that will give you an instant answer as to whether or not you can be insured, ideal for anyone who is looking for a cheap and cheerful policy without the bells and whistle
  • Family Income Benefit – This type of policy covers you for exactly the same scenarios as their Term Insurance, but pays out to your family in monthly instalments instead. This can be a useful option when it comes to budgeting
  • Whole of Life – basically this insurance would run and run until you pass away, there is no expiry date…well technically it expires when you ‘expire’. Naturally for this type of insurance because it’s guaranteed to pay out, you do have to pay more for it

Sounds great – a plan to suit every eventuality and budget. Let’s take a look at what the industry experts say…

What Is AIG’s Defaqto Rating?

Defaqto is a service that compares financial products and gives them a star rating based on their features and benefits – with 5 stars being the best. AIG has a 5 star rating, and in 2019 they won Best Provider for Service Excellence at the PRIMIS Network Awards as well as Outstanding Insurer of the Year and Best Business Experience – so as insurers go they are definitely a force to be reckoned with.

AIG are certainly impressive with their policy options and award-winning service, but what do they have to offer in the way of extras with their Life Insurance policies?…

What Else Can They Offer?

A lot. AIG have lots of extras, both free and paid-for, that can be added to your Life Insurance cover…

  • Best Doctors – This is a service that is provided to you and your family when you buy a policy through AIG. This will give you access to invaluable second medical opinions in order for you to get the right diagnosis, treatment and care
  • Smart Health – This is a FREE virtual GP you can access from your phone. You simply download their app and are then able to call a GP anytime 24/7. They can help diagnose your condition and even refer you onto a specialist or order medication to your local surgery.
  • Winston’s Wish – AIG like to go a little further than just providing financial security for your family in the event of your death, and work with this leading UK charity in order to help bereaved children to get specialist support should they need it
  • Funeral Pledge – This helpful little extra comes in the form of financial assistance for your family – namely up to £10,000 of your valid claim being paid in advance towards the cost of a funeral, which could provide peace of mind for your family during a very difficult time.

Now, awards and ‘extras’ are all very well and good, but they won’t help your loved ones when it counts…so how are AIG at paying out on their Life Insurance policies?

Payout Statistics

In 2018 AIG paid out 99% of Life Insurance claims. Enough said. Do you even need to look at any others? Yes…

Legal & General

Legal & General have been around for nearly 200 years and are the UK’s largest provider of Life Insurance products. The company was founded in 1836 by Sergeant John Adams and 5 other lawyers in a coffee shop in Chancery Lane, and today continues to be one of the biggest around. But does being one of the biggest also mean being the best? Well, they do offer one of the best Life Insurance policies around….

How Good Is Their Cover?

Legal & General offers 4 different options when it comes to Life Insurance:

  • Term Insurance – A policy that is fixed for a set period of time (a ‘term’) that covers you against death and terminal illness up until the last day of that term. Money is paid to your family (as an example) as a tax-free lump sum if you die
  • Whole of Life – basically this insurance would run and run until you pass away, there is no expiry date…well technically it expires when you ‘expire’. Naturally for this type of insurance because it’s guaranteed to pay out, you do have to pay more for it
  • Family Income Benefit – This type of policy covers you for exactly the same scenarios as their Term Insurance, but pays out to your family in monthly instalments instead. This can be a useful option when it comes to budgeting
  • Rental Life Insurance – Like Family Income Benefit as it pays out to your family in monthly instalments but this specific rental-based option which allows your client to increase the benefit amount if their rent increases.

How About Their Defaqto Rating?

Another 5 star rated product from an award winning insurer. In 2018 Legal & General won Provider of the Year at the Financial Times PIPA Awards, as well as Insurance Firm of the Year. In fact, they’ve been consistently winning these titles since 2015, showing how consistent their results are within the industry.

But what else do Legal & General have to offer customers? Let’s take a look at those all important extras.

Extra! Extra! Read All About It!

  • Accidental Death Benefit – this is given whilst your application is being processed, giving you peace of mind that you are covered in case of accidental death, even if you pass away BEFORE you’ve even been accepted!
  • Free Life Cover – If you are taking out life cover to cover a mortgage, Legal & General offer free life cover whilst your application is being processed
  • Second Medical Opinion – If you make a claim for terminal or Critical Illness it gives you access to a database of consultant specialists in the UK to support your claim
  • Nurse support – A suite of Nurse Support Services provided by RedArc Assured Limited included as standard

All very well worthwhile extras to have, but how do Legal & General measure up against others when it comes to their claims statistics?

Payout Percentages

97% of all Life Insurance claims were paid out by Legal & General, so they’re certainly holding their own!

And how about the other insurer in my top three – Aviva?

Aviva

Aviva is a British insurance company with headquarters in London, and 33 million customers across 16 countries. It is the largest general insurer in the UK, and has a  heritage dating back over 300 years. The company was created in 2000 when Norwich Union (est 1797), and CGU (a merger of Commercial Union and General Accident) joined forces, with the name ‘Aviva’ being adopted in 2002.

How Good Is Their Cover?

Aviva offer 4 different types of Life Insurance cover:

  • Term Insurance – A policy that is fixed for a set period of time (a ‘term’) that covers you against death and terminal illness up until the last day of that term. Money is paid to your family (as an example) as a tax-free lump sum if you die
  • Whole of Life – basically this insurance would run and run until you pass away, there is no expiry date…well technically it expires when you ‘expire’. Naturally for this type of insurance because it’s guaranteed to pay out, you do have to pay more for it
  • Family Income Benefit – This type of policy covers you for exactly the same scenarios as their Term Insurance, but pays out to your family in monthly instalments instead. This can be a useful option when it comes to budgeting
  • Simple Life Insurance – This type of policy just like AIG’s requires you to answer fewer questions to get covered, and you can complete an online application that will give you an instant answer as to whether or not you can be insured, again ideal for anyone who is looking for a cheap and cheerful policy without the bells and whistles

And Their Defaqto Rating?

5 stars of course! And they were awarded General Insurer of the Year by the Insurance Times in 2019, as well as Trailblazing Company of the Year and Company of the Year at the We Are The City Awards. So, just as impressive as their competitors.

In order to make up your mind I guess you want to hear about those extras that they offer their customers; benefits such as:

Aviva’s Extra Bits

  • Protection Promise – this is applied whilst your application is being processed giving you up to 90 days of FREE cover meaning even if you pass away BEFORE you’ve even been accepted Aviva will still pay out!
  • Free Life Cover When Buying a House- If you are taking out Life Insurance to cover a mortgage, Aviva offer free life cover whilst your application is being processed to ensure your mortgage is still paid off if you die before you’ve even been accepted.
  • Fracture Cover – Pretty self-explanatory, you can pay £4 extra a month on your policy and if you fracture a bone, you’ll get a pay-out. The size of the pay-out will depend on the type of fracture (there are 18 specified types – who knew!?) they do exclude some hobbies and occupations, so call us if you do anything risky!
  • Global Treatment For just £4 extra a month, this benefit will cover you and your child for the cost of treatment and travel to the best doctors and medical facilities around the world (outside the UK). The cover will pay out up to £1m per person during a 12 month period and will cover as many treatments as you need up to the amount of £2m, which includes medical, travel, accommodation expenses and the costs of any medication which cannot be bought through the NHS. This add-on also allows you to bring a companion with you (your partner). They will also have all their travel and accommodation costs paid for.

All sounds great doesn’t it? But compared to Legal & General and AIG, how do they fare in the claims statistics stakes?

Pretty darn good…

Payout Statistics

Aviva pay out on a whopping 98.6% of Life Insurance claims, with that small percentage not paid being down to non-disclosure – just like the other insurers.

And so there you have it; who I believe to be the three best Life Insurance providers around. Of course there are other insurers out there, and I would always recommend that whatever type of policy you want to purchase, you should seek the advice of a financial advisor first.

If you have any insurance related questions, Life Insurance cover or otherwise, please do get in touch. Our advice is free, and one of our qualified advisors would be more than happy to help.

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Luke

Luke

I’m the Life & Critical Insurance guy! Having worked throughout London and the South East for years in this industry, seeing many bad habits, I wanted to create a company that put the man on the street first! I wanted to share all my knowledge in a way that was easy, simple and fun to read and I wanted to make sure whenever I or a member of my team speak to a customer, we cut out the ‘industry jargon’ and never pressure or push anyone to take out a policy they don’t want or understand, thus More Than Money was born!

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