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Halifax life insurance review 2022

Who Are They?

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
  • Policyholder’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

Additional Benefits

  • 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.