Frequently Asked Questions

All you need to know about level term life insurance

About term life insurance

Why do I need life cover?

If you have a partner or family who depend on your regular income, you need to be sure they would cope financially if anything happened to you. They would still have to find money to pay the mortgage, buy food, cover the bills and even keep the family car running. Level term life insurance would help to replace your income and maintain your family's standard of living. Alternatively, mortgage decreasing life insurance would just pay off your outstanding mortgage and protect the family home.

I already have life cover. Why do I need more?

You need to review your life cover regularly to make sure it's still appropriate for your circumstances. You may need to top up your life cover if you've recently had children, moved home or changed your job. Also, inflation may have reduced the value of any life cover you have taken out in the past, so it's worth checking whether it would still meet your family's needs.

What is life insurance and how does it work?

Level term life insurance will pay out a cash lump sum if you die during the policy term. This sum is guaranteed from the start of your policy as long as you keep paying your premiums. Your family can use the money however they choose.

Mortgage life insurance is also known as decreasing term insurance. It is designed to pay off the outstanding balance on a standard repayment mortgage if you were to die during the policy term. The value of your cover decreases in line with the amount of money you still owe on your mortgage.

With either policy, your premiums stay the same and you can choose how much cover you need and how long you want it to last. Your policy can cover you and your partner if you wish, and it will pay out on the first death. After that the policy will end. Neither policy has any cash-in value at any time.

How much life cover do I need?

You can choose how much cover you need and how long you want it to last. When you apply, you will be able to choose different options.

Mortgage life protection is designed to cover the outstanding balance on a repayment mortgage, so you need to take this in to account when applying.

Will I need a medical?

As long as you can answer 'no' to a few health questions, we won't require a medical. You may need a medical if you have suffered a medical condition, either now or in the past. You must give us accurate information, as we may not pay out in the event of a claim if you do not disclose all the information required.

When is it best to take out life cover?

As soon as you have responsibility for a mortgage, partner or family, it makes sense to take out life cover. The cost of life cover gets more expensive the older you get so you may benefit by taking our life cover early.

Who can take out AA life cover?

AA life cover can be taken out by any UK resident aged 18 to 69. You can take out cover as a single policy (for you) or a joint policy (you and your partner). If you take out cover for two people it will pay out once, when the first person dies, and then the policy will end.

If you add our critical illness option to your life cover policy, it will pay out when the first person dies, or is diagnosed with a critical illness covered by the policy during the period of cover.

Why would I need joint life cover?

Many families depend on the income from both partners, so if either one dies it may leave the family struggling to cope financially. Even if one partner doesn't work, they may take most of the responsibility of running the home and looking after the children. If they were to die, you might have to work fewer hours, or you may need to pay for home help or childcare.

How are my life insurance premiums calculated?

When calculating your life insurance premium, we take into account a range of factors, including:

  • your age
  • your gender
  • whether you smoke
  • your medical history
  • the amount of cover you need
  • the length of time you would like your cover to last
  • the type of life cover you require

The less likely you are to claim, the lower your premiums are likely to be.

What if I can't afford my premiums?

If you have taken out the premium payment option and you find you are unable to work due to illness or accidental injury, your premiums will be paid for up to six months. If you don't have any protection, your plan will be cancelled and there will be no cash payout, as the plan has no cash-in value.

How do I make a claim?

A claim can only be made if you die within the term of the policy (unless you take out critical illness cover) Your partner or dependants should call the claims telephone number in your policy booklet. Make sure they are aware of where the policy details are kept, as well as your wishes as to how the lump sum should be spent.

The cash lump sum will be paid to your estate and may be subject to inheritance tax. However it is possible to write your policy in trust, in which case it will be paid directly to the person(s) your nominate, tax free, without having to wait for probate. For a trust form please call us free on 0800 294 4837.

How do I pay my policy premiums?

Payments are made monthly by direct debt.

What happens if I already suffer with a specific medical condition?

You must tell us at the time of your application. We may then write to your doctor or request that you attend a medical examination before a final underwriting decision is made.

What is a waiver of premium?

Waiver of premium is a life insurance policy option that you can add to your cover. It means that if you are unable to work following an accident or illness, the insurer will usually take over premium payments six months after you become unable to work.

The waiver of premium claim stops when you are assessed as fit to return to work.

How do you calculate life insurance premiums?

Life insurance premiums are based on the following factors: your age, whether you smoke, your medical history, the level of cover you need, the length of time you need cover for (the term) and the type of cover you choose.

Does a joint policy mean that the sum insured will be paid out twice?

No, the life cover that is detailed in your quote and confirmed in your policy document is the amount paid in the event of a single valid claim. The sum assured (your level of cover) will be paid if either joint policy holder dies or is diagnosed with a terminal or critical illness (where critical illness is covered). The policy will then end and no further benefits will be paid.

Contacting us

How can I contact you?

Call one of our consultants on 0845 602 9199. Lines are open Monday to Friday 8am to 8pm, Saturday 9am to 5pm, Sunday 10am to 5pm.