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Prudential life insurance review 2021

Who Are They?

The Prudential Group is a global insurance provider, with a significant presence
in the US, Asia and the UK helping millions of customers the world over with
their Life Insurance and pension products. Their life insurance policies are
well-known and trusted internationally with a high rate of payout.

What types of life insurance are on offer?

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Level Term Cover

For level term cover, premiums and limits are fixed, meaning your payout
will stay the same over your policy period. The lump-sum you elect to purchase
at the beginning of the policy is exactly what you will be able to claim up to
policy expiry

Decreasing Term Cover

Decreasing term covers are usually a cheaper option than level term cover.
This is because the value of your payout decreases over the policy term. If one
of the financial obligations you are looking to cover is a mortgage for example,
you might look at this option since your mortgage obligation will reduce over
time. Essentially decreasing term cover means if you have chosen a £50,000
payout, this will come to be nil upon policy expiry.

Increasing Cover

Inflation can mean the value of your level term cover can lose some of its
worth over time. If your coverage payout is fixed then the £100,000 you claim in
20 years will be worth a lot less than the £100,000 you could have claimed at
the beginning of the policy. Increasing cover solves this by increasing your
coverage payout in line with the Retail Price Index. Your premiums similarly
increase, but at least you won’t pay in more than you might receive back.

Additional Cover Options

Critical Illness Cover: for an additional premium you can add a cover that
significantly enhances your life insurance policy. Life insurance covers you for
death or upon diagnosis of a terminal illness. Adding critical illness cover to
your life insurance means that you are also able to claim a benefit amount
(albeit less than your life policy payout) in the event you are diagnosed with a
serious medical condition such as a heart attack, stroke or cancer. This means
if you are unable to work because of a serious illness, you won’t have to worry
about living expenses until you recover and are able to work again.

Waiver of Premium Cover: if you are unable to work, this benefit pays your
premium if you become too ill or incapacitated due to sickness or injury to
carry out your normal occupation (available for an additional premium).

Life Insurance Features

  • Pays out a lump sum on death or on diagnosis of terminal illness (subject to
    provider’s policy wording and conditions)

  • Can choose between single or joint policyholders
  • Usually minimum and maximum ages apply, both upon applicant and for claims
    being made

  • Instantaneous decision upon application for most potential policyholders

Additional Benefits

We compare plans from the leading life insurance providers

There are a few benefits one might expect to see in relation to their Life
Insurance Policies:

  • Second medical opinion at no extra cost: the best doctors will conduct an
    in-depth review of your diagnosis and medical case. It will then provide expert
    advice and recommendations for medical treatment.

  • Free Will writing services
  • Additional contribution from insurance provider towards funeral costs
    (usually £300)

  • Ability to place policy payout in trust, so that your beneficiaries, upon
    collection of life insurance, do not have to subject this benefit to inheritance
    tax

Why Might a Payout not be Paid?

  • Failure to provide accurate policyholder details given at time of
    application

  • Self inflicted injury or suicide within 12 months of the policy start date
  • If you have chosen to add on Critical Illness Cover, a diagnosis for valid
    payout must be for one of defined illnesses as listed on the policy document

  • Failure to maintain policy premium payments

Defaqto Ratings

Defaqto ratings allow for independent comparison between product offerings and
insurance providers. This is a service that compares financial products, giving
them a star rating based on the features and benefits they offer, with 5 stars
being the top rating. A Defaqto 5 Star Rating means this insurer provides one of
the highest quality offerings in the market.

Advantages to Look For

  • Flexible coverage options, with different Term Covers (Level Cover,
    Decreasing Term Cover or Increasing Cover) to suit the policyholder’s needs.

  • Large coverage amounts that are appropriate for the level of financial
    security necessary for you and your loved ones

  • High rate of payout. Average rate of payout for life insurance claims is
    >95%

  • Being able to choose between a single or joint coverage can be a
    cost-effective way of protecting both yourself and your partner.

  • Fixed life insurance monthly costs which will help you to budget effectively
    for the long term

  • Discounts for existing customers of other product lines
  • Fully regulated by the Financial Conduct Authority. This means that in case
    of company insolvency, any outstanding claims or payments that the company is
    unable to pay will be fully covered by the Financial Conduct Authority
    Compensation Scheme, and customers will not be left out of pocket

Disadvantages to Look For

  • Term limits. Maximum terms that come before the policyholder’s passing means
    you might not ever benefit from this insurance policy. Some insurers offer whole
    of life coverage, and indeed allow for a certain anniversary date (such as
    turning 90 years old) to be the last premium payment date, after which cover
    continues for free

  • Fixed premium cover means that the value of your policy payout will reduce
    over time with inflation. This could result in the value of your payout being
    less than the value of your premiums paid in

  • Policies with no cash-in value: if you cancel your policy you will get
    nothing back. Some life policies offer a 50% cash-in value upon reaching a
    certain age or amount of time passed on the policy

  • Lengthy approval process: this could mean you (and your loved ones) are left
    unprotected needlessly when other providers are able to provide instant quotes