9 frequently asked questions about life insurance for high-net-worth clients

Life insurance can be a complex subject, so it is natural for your high-net-worth clients to have questions if you are thinking of arranging this to support them with their succession planning.

By understanding more about how life insurance can support them, your clients can feel more confident that they are making the most sensible choice for their circumstances.

Read on to discover the answers to some of the most common questions we receive about life insurance.

1. What if my lifestyle changes?

What is true at the time of application is what is relevant. If your lifestyle improves afterwards some insurers will allow you to reduce your premiums, but hazardous changes to your lifestyle can never cause rates to go up.

2. Can my policy keep track with inflation?

Most providers offer an indexation option on the sum assured, which can be included on the policies for no additional cost at outset. This is usually linked to the Retail Prices Index (RPI) or fixed at 5% a year.

3. What if I smoke?

“Smoking” covers the use of any nicotine products, including vapes, and premiums will typically double.

4. What if I take recreational drugs?

Recreational drug use will likely lead to a postponement if used in the last five years.

5. Are insurance companies just making a profit off me?

Insurers make the majority of their money from policies that lapse or are cancelled. Your clients will only be buying policies that meet a need and the John Lamb Hill Oldridge Renewals and Valuations service ensures that they are closely monitored for their duration.

6. Is there a penalty for cancelling my policy early?

No – the policy can be cancelled at any time without loss other than the premiums already paid.

7. Is the medical invasive? Where do I take it and who pays for it?

Clients will visit a medical examiner in London or locally if preferred. Appointments take between 30 and 60 minutes and typically involve a blood sample, urine test, and sometimes an exercise ECG. The cost of the medical is covered by the insurer.

8. Does buying cover now cost more in the long run?

It is always cheaper overall to procure cover as soon as possible. Not only do premiums increase with age, but as clients get older the likelihood of medical complications increases and therefore there is a higher risk of premiums incurring a loading.

9. What about hazardous pursuits?

Clients often engage in a variety of hazardous pursuits. Not all of these will be a problem for obtaining life insurance, but some examples that would need further investigation include:

• Skiing off-piste without a guide
• Wreck diving
• Mountaineering
• Solo flying
• Horse racing.

Please feel free to contact our team for support if you have any further questions about hazardous pursuits that could affect your clients’ premiums.

Get in touch

To learn more about how our specialist team of brokers can help you to support your clients with life insurance and succession planning, please get in touch. Email [email protected] or call us on 020 7633 2222.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.