Prudential Life Insurance Review 2023

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.

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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