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Things you should know about life insurance

Many people buy life insurance so that they are covered should they die or have a serious illness or injury, or that their mortgage will be paid if something happens to them.

‘Personal’ insurance policies are similar to general insurance policies, but instead of covering assets such as cars or homes, it is your income earning potential, your health, or your life that is covered.

Life Cover pays a lump sum should you be diagnosed with a terminal illness (with less than 12 months to live) or you die. It can help you through your last days or provide for those left behind. Less comprehensive products are also available to cover you for accidental death, injury and to help pay for funeral expenses. These types of products can make insurance affordable, and quick to buy. They have fewer application questions but lower levels of cover.

Living assurance (critical illness cover) pays a lump sum to help support you and your family in the event that you have a defined serious medical condition. It could assist with extra treatment costs or enable you to take enough time off work to properly recover.

Mortgage and income protection pays a monthly benefit to help you meet your ongoing commitments should your income be impacted due to serious illness or injury. You also have the option to add on redundancy cover.

Each form of insurance meets a specific need or covers a specific life stage and it is important for you to understand what you are trying to protect, what is affordable and where to best spend your money to protect your biggest asset – you! Life Cover, Living assurance and Mortgage and income protection each contain numerous features and benefits, which are outlined in their respective product summary. Please refer to the relevant policy wording for full details, including the benefits, exclusions and limitations of the cover. If you are unsure about which insurance policy to choose, please call us on 0800 100 207.

Are you considering changing or cancelling an existing policy?

It’s important for you to know what type of policy you have and understand what it covers and what it doesn’t (benefits, exclusions and limitations). Does it meet your needs? Is there anything about the policy that is advantageous to keep or are there benefits you are paying for which you no longer need? Typical things to consider are:

  • When you bought your policy did it meet your needs?
  • Can you upgrade?
  • What’s changed?
  • Has your health deteriorated – will you have exclusions or pay more elsewhere for the same cover?
  • Does your policy’s monthly premium and benefit amount increase annually by inflation (CPI)?
  • Can you get more / different cover without having to answer medical questions?
  • Have you ensured that your replacement policy will benefit you over the longer term?
  • Do you need advice?

All too often people change their policies or insurance company based on price or benefits available. Make sure you understand what you may be losing from your existing policy – you might want to ask for assistance to review this. For example:

You may have taken out your policy when you were healthy and the policy had no medical conditions excluded or premium ‘loadings’. Ten years later, you decide to change your policy and you have subsequently had a mild heart condition. The new insurer may either exclude this condition or add an amount onto your premium to cover it. Therefore, it may be more advantageous to keep your existing policy and make the relevant changes to it. Worse still – you cancel your existing policy whilst applying for your new one, only to find that the new application is declined.

Take care or ask for help when changing or cancelling policies! We are here to help – call 0800 100 207.

There are a number of variables that can affect your premium payments, including:

  • Your age – this is critical, as different ages expose you to different risks
  • Your medical condition and family history - this could determine what happens to your health
  • Whether you are male or female brings different variables
  • Smoking, drinking and substance abuse may have an effect on your health
  • What work you do or sports you participate in - this may increase/decrease the chances of something happening to you
  • How much cover you want
  • What conditions or events you want to insure against

Once the insurer has these answers, they will quote you on your specific needs and risk. It is critical that you answer these truthfully to avoid any discrepancies at claim time. You can opt to change your premium by:

  • Lowering your level of cover
  • Improving your health
  • Avoiding substance abuse or stopping smoking
  • Reducing high risk activities

Generally, the younger and healthier you are, the better your chance of getting cover at standard rates. Your policy is yours for as long as you keep paying the premiums or until you make a Life Cover or Living assurance claim, so make sure it’s the right policy for you! Read our FAQs for more information.


AMI Life Insurance products are underwritten by Sovereign Assurance Company Ltd. AMI Insurance Ltd receives a commission in relation to the policy. It is not the insurer and does not guarantee Sovereign.