Halifax Life Insurance Review 2023

Halifax is a well-established British insurer, with roots going back to 1853 and now operating as part of the Bank of Scotland. Halifax offers a range of financial services including banking products, insurance, and mortgages.

What types of life insurance does Halifax offer?

Halifax Life Insurance gives the policyholder and their loved ones financial peace of mind, so that should the worst happen, any following financial obligations or burdens will be met.

We’ll go into more detail below, but the life insurance products Halifax offers include: level term policies, decreasing term life policies, increasing term life policies and whole of life policies.

Level Term

The level term policies that are provided offer a fixed amount of coverage payout and guaranteed premium across the policy period. In this way you know exactly what your premium outlay for the duration of the policy, and can be fixed into your budget.

Decreasing Term Life

This product is suitable for those with long-term loans or mortgages, and those looking to protect their dependents from any outstanding monies owed in the event of their passing. The payouts decrease over time, and will eventually end up at zero. This runs in tandem with your mortgage for instance, which will also decrease as you pay it back.

One thing to note is that most other life providers have a predetermined decrease rate for this kind of product. Halifax lets you choose the rate at which your policy decreases, allowing you to decide how and when your cover reaches zero.

Increasing Term

Halifax’s increasing term life coverage is a good option for those concerned about the long term impact of the financial markets on their life payout. With Halifax’s Increasing Term cover, your payout will annually increase in line with inflation. You might typically see anything from the minimum of 2% up to a maximum of 10%. Of course, there’s no rainbow without the rain, and your premium will also increase too.

It’s important to note here that if this coverage is opted for, premiums increase at a rate of 1.4 times the percentage increase of your benefit. Other insurers will match the increase of your benefits and premiums rather than applying a premium increase in excess of your benefit increase.

Whole of Life

The policies mentioned above will come with a maximum age limit, upon which the policy will expire and coverage will cease. There will be no cash in value and so no premiums will be returned. If you are looking for a more guaranteed life insurance cover, then you can opt for the Whole of Life cover which does exactly that, lasting until the event of your death.

Typical Coverage Conditions and Offerings of Halifax Life Policies:

• Minimum Coverage Limits: £25,000
• Maximum Coverage Limits: £15m-£25m, depending on policy chosen
• Maximum Age of Coverage (unless choosing whole of life coverage): 79
• Policy holder’s children are protected also, up until the age of 22. They have a maximum payout amount the lower amount of £25,000 or fifty percent of the policyholders payout (whichever is lower).
• Policies will not pay out in the event of suicide or self inflicted injury that occurs within 12 months of policy inception.
• Applicants must reside in the UK
• Policyholders’ children are also included under Halifax’s life policies: in the event of the death of a child, policyholders will receive a one-off benefit of £5,000.

Optional Add-Ons

• Halifax offers policyholders of adding a joint policyholder on to the policy. Do note that the policy will only pay out once, and upon a life claim will cease coverage.
• Critical Illness Cover can also be added to the policyholder’s life policy. Should the policyholder be diagnosed with a critical illness during the policy period, the policy will pay out a cash benefit. Life coverage will continue.
• Maximum payout: £3m
• There are 49 critical illnesses covered, including heart attack, stroke and various cancers
• For an additional cost, you can add premium protection cover to this. Should you find yourself incapacitated from work for 26 weeks or longer, Halifax will waive your payments until you return to work.
• The policyholder’s children are also included under this Critical Illness Cover

Additional Benefits

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• Upon purchase, policy holders and their families gain access to a complimentary medical advice service. This provides additional support in the event of serious illness, disability, recovery after hospital discharge and bereavement. In addition you will be able to gain a “second opinion” if you are unhappy with the diagnosis or treatment initially recommended in the event of a terminal or critical illness. You can consult top medical specialists in the UK, and gain extra peace of mind that the course of action recommended is the best option for you.
• Accidental death benefit during application process: for up to 90 days whilst your details are being considered you will have coverage if you die in an accident or following on from one. This maximum benefit amount under this perk is £250,000, but will be the sum-assured you have applied if it is less. This coverage will cease once a decision has been made on your application.
• 90 Days of Free Mortgage Cover: from the time Halifax receives the policy application to the exchange of contracts, this pays up to £250,000 in mortgage repayment cover that continues until a decision has been made on an application or the 90 days is up.

Policy Review

Whilst Halifax offers a dependable and stable life insurance policy (it has been around for over a hundred years) there are some drawbacks. Its increasing term cover gives a disproportionate increase for a policyholder’s monthly premium that is 1.4 times the increased payout. As mentioned, most insurers offer premium increases that match their payout increases. Furthermore, Defaqto, the independent consumer review service, has given Halifax’s life policies a rating in 2020 of two Stars out of five. This deems the product to be below average offering in the market and that being the case, it might be pertinent to compare this with other alternatives.

Defaqto ratings