What is indexation?
- Indexation future-proofs the value of your Life Insurance cover
- It allows your life insurance cover to keep pace with inflation
- So, your cover is worth as much when you need to claim, as it is today
Why should I add indexation to my policy?
The idea behind indexation is simple. It’s just an add-on to your Life insurance plan that allows you to increase your cover in line with inflation.
It's important to consider this, especially when inflation rises, as it ensures your cover remains valuable.
While your monthly payments may increase slightly, your pay-out will also rise, keeping your coverage effective over time.
Let's give you an example:
If you had £100,000 worth of Serious Illness Cover, without an indexed plan:
The value of cover in today's terms in 20 years time would be £55,3701. This is almost half of the amount you originally started with.
With an indexed plan, your cover would keep its real value. Watch our short video to explain what this could mean for you.
1 Based on inflation averaging 3% for illustrative purposes only. Actual rates may vary.
What's in it for me?
- We'll give you an upfront discount on your premium when you select Indexation. Up to 3% on Term and 5% on Whole of Life Plans2.
- Your cover increases over time. This protects your future needs without any further medical underwriting - when cover is often more expensive and harder to get.
- When a claim is made, your loved ones receive a pay out of the same value in real terms as you thought of all those years ago.
- Indexation means your cover is protected against rises in the cost of living - making sure you have the cover you need now and in the future.
- Indexation is flexible - You can decline increases in cover at any time. But we do ask you accept at least one increase in cover every three years. If you decline three consecutive increases, we remove indexation and your benefit converts to level cover.
2 Discount applies at plan start date only and does not reduce future premium increases.
How does indexation work?
- We'll be in touch - Each year before the anniversary of your plan, we'll invite you to increase your cover and confirm the new cover amount and premium.
- It's your choice - you decide if you want to increase your cover. If yes, you don’t need to do anything.
- We will then increase your cover and premium from your plan anniversary. If you don't want the increase, that's not a problem, you just need to let us know.
- If you decline three consecutive increases, indexation will be removed. Your plan and will then revert to level cover - meaning it won’t keep up with the rising cost of living.
Should I add indexation to my life insurance?
Indexation helps your cover grow over time, so it keeps pace with the rising cost of living. That means extra protection for the future – but there are a couple things to think about.
- Indexation may not be suitable for customers seeking fixed premiums or those on tight budgets.
- Because your cover could increase each year, your payments will go up too. It’s important to check you’re comfortable with those changes in the long run.
Want to get a quote?
All it takes is a couple of minutes.
Need more advice?
Our team are here to help you decide if this is the right cover for you. They'll give you qualified advice and recommendations. No obligation, no charge.
Call us on 0330 678 3328
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