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Hot Topics
- Where can I find help?
- To help you find your question, we have organised our FAQ’s into relevant groups. Answers to all sorts of more general questions are found in the General Questions section.
- Life Insurance - why do you need it?
- You may want Life Insurance to provide some financial protection for the family or to cover the payment of an Interest Only Mortgage.
- Should you include Terminal Illness Insurance?
- You probably won’t need to - most policies include Terminal Illness cover free of charge on all Life and Critical Illness policies.
- What is the Difference Between Critical Illness Insurance and Terminal Illness insurance?
- Critical Illness Insurance is much more comprehensive than Terminal Illness cover.
- Should the cover be on joint lives or separate lives?
- It may be better to buy separate policies.
Life Insurance and the Law.
We are pleased to provide you with the following information which represents the legal aspects we think you will find most interesting. The information is not designed to be either definitive or exhaustive but is simply an introduction.
If you require more detailed information relating to the regulation of life insurance companies or insurance brokers, we suggest that you visit the Financial Services Authority’s web site at:
www.fsa.gov.uk
UK Laws and life insurance
You have to be a UK resident in order to take out a life insurance policy with a UK based insurance company. This is not a requirement laid down in UK law, but UK laws and tax arrangements make it impossible for a UK based insurance company to offer insurance to anyone other than a UK resident.
There are no laws in the UK that require a person to have life insurance. It’s an entirely voluntary type of insurance.
All UK Insurance Companies are subject to UK Corporate Laws. However, there are special regulations that only apply insurance companies. These control the value of the risks the companies take on in relation to their financial reserves. These regulations are designed to ensure that your insurance company will be in a position to pay if you claim.
The Data Protection Act 1998 is concerned with way all UK businesses store, safeguard and use the data they collect about people. This is particularly important within the life insurance industry as the companies store significant amounts of information about you – including your age and hobbies to the very sensitive area of information about your health. One of the key provisions of the Data Protection Act says that if a business wishes to pass on your information for marketing purposes, the business collecting the data must tell you and give you the opportunity of refusing permission for your data be used in this way.
All reputable web sites selling life insurance will have a “Privacy Statement” which tells you how they handle your information and how it is used. You will find a link to our Privacy Statement at the top of this page.
The Financial Services and Markets Act (2000) is the most important piece of legislation affecting the promotion of financial services. The Act is very complex but is primarily concerned with protecting you the customer. The workings of the Act are primarily overseen by the Financial Services Authority (FSA). The FSA currently concentrates on investment products, investment institutions institutions, protection insurance, general insurance, mortgages and the way financial advice is provided.
The FSA seeks to ensure that the people who provide financial advice are trustworthy and competent (which includes being well supervised and well trained), and that any advice is given in the clients best interests. The FSA also seeks to make sure that you are given full and accurate information about the products you are being advised to buy, or have selected, both before and after you have bought them.
They also closely oversee the organisations that sell financial products and the advice they provide. Everyone and every organisation that gives financial advice must be authorised by the Financial Services Authority.
The Act distinguishes between investments made as a result of a recommendation from a Financial Adviser and “execution only” business. This is where a customer is wholly responsible for the selection of the investment (in which circumstance the Financial adviser is only processing the purchase of the investment on the customers’ behalf and provided no advice whatsoever). Under “execution only” business, the Adviser bears no responsibility for the suitability of the product for the customers needs.
At the outset, all customers buying through a Financial Adviser must be informed in writing of the Terms and Conditions under which the Adviser conducts business. These will include details of a complaints procedure. In outline, if a customer wishes to complain, then the customer must detail the complaint in writing and sent it to the Compliance Officer of the business that provided the advice. That business then has to investigate the complaint and reply to the customer in writing. If the Compliance Officer upholds the complaint, and the customer has suffered a financial loss as a result, then the business must agree a financial settlement with the customer. Ultimately, if the customer has suffered financial loss and cannot accept either the organisations’ conclusions or their proposed financial settlement, then the situation can be referred to the Financial Ombudsman. The Financial Ombudsman’s service if free to the customer and they are wholly independent. The Financial Ombudsman’s decision is usually binding on both parties.
The other central piece of protection for the customer is the Financial Services Compensation Scheme. This provides the customer with a level of protection if a UK financial organisation becomes bankrupt or cannot properly meet its’ financial responsibilities to its investors.
Life insurance bought on the Internet
Few web sites selling life insurance will offer you full personal advice. Most will provide you with information upon which you can make an informed choice. This is because, in order to give personal advice, they would need to fully understand all your personal circumstances, both domestic and financial. This information gathering is then recorded onto a document called a Fact Find. Such a detailed process takes a lot of time and is simply not practical on the Internet.
Frequently Asked Questions related to the above topic.
Click below if you wish to read them: -
- What does a Life Insurance broker do?
- Information about The Financial Services Authority
- Complaining about a Life Insurance Company
- Complaining about a Life Insurance Broker
- Complaining about misleading advertising
- What do you need to know about life insurance
- What factors can add to the price?
- Do you have to buy your Life Insurance through your mortgage lender or mortgage broker?
- Go to menu of Frequently asked Questions about Mortgage Life Insurance
- Go to menu of Frequently asked Questions about Life Insurance
- Go to menu of Frequently asked Questions about Critical Illness Insurance
- Go to menu of Frequently asked General Questions
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