Die - that's the last thing I'm going to do (Marks & Spencer Life Assurance)

Member Name: markysparky

Product:	Marks & Spencer Life Assurance
Date:	14/07/09 (94 review reads)
Rating:

Advantages: Good brand, sound product

Disadvantages: No option to include critical illness cover

Which company would I be dealing with?

Marks & Spencer (M&S) Money is the financial services arm of M&S and offers a range of products including credit cards, personal loans, foreign exchange and insurance.

M&S money market a simple, straightforward life assurance plan. The cover under the policy is provided by mega-global-super bank HSBC. So, what we have is a customer buying what is packaged as "M&S Life Assurance" from their favourite underwear and chocolate teacake retailer but actually forming a contract of insurance with HSBC. It's a common ploy - buy from a trusted, well respected high street brand (M&S) and end up with a policy from a traditional financial institution. It wasn't always this way and I have a M&S life insurance policy, on my own life, that was actually covered by M&S themselves under their M&S Financial Services company.

M&S earn commission (as would an independent financial adviser) from HSBC, for each policy sold. They also gain another customer to whom they can market their other financial services.

What types of cover are available?

M&S offer:
- level cover (where the sum assured is constant throughout) for a term of between 2 and 50 years
- "mortgage" life cover (where the sum assured decreases each year, mirroring a capital reduction on a repayment mortgage) for terms of between 5 and 35 years
- a sum assured of between £15,000 and £1,000,000, subject to a minimum premium of £5 a month (all premiums are payable monthly by direct debit)
- terminal illness benefit (early payment of the sum assured if you're diagnosed with a condition where your life expectency is less than 12 months
- accidental death benefit - free cover (of an amount equal to the sum assured) between your applying for the policy and going live. This is limited to a maximum of £250,000 and cannot last for more than 60 days
- single life or joint life 1st death
- guaranteed premiums that do not vary during the policy term

What isn't covered?

This is pure and simple life cover and DOESN'T INCLUDE:
- waiver of premium benefit (paying your premium if you're incapacitated and unable to work for more than 6 months)
- critical illness cover (which would pay the sum assured if you suffered from one of a number of serious, potentially life threatening, conditions).
- unemployment cover

I mention these missing benefits as other insurers may include them although, as I say, at an appropriate extra cost.

How would I get M&S life insurance?

I suggest you go to http://money.marksandspencer.com/ and navigate to the life insurance webpages. You can get a standard rates quote or apply online. There is also a help phone number which, I would guess, takes you through to a dedicated telesales area which may be able to assist you with completing an application (through a scripted series of questions).

There's a 5% discount for applying online (which for a chunky premium over a lengthy term could equate to a very tidy amount). Make sure you have plenty of time to spare if you do apply online as there are many, many personal (some very personal) questions to answer.

What happens after I've applied?

Firstly you'll be directed to a key facts document which will explains the basics of the cover - you should read this carefully.

Your application will be checked to make sure all questions are answered and if they are, the answers will be assessed (or "underwritten") which may be done by a computer-based system, by a human underwriter or a combination of both.

If there's enough information to offer you terms, then you'll be contacted and asked if you want to proceed and put the policy in-force. If more information is required, the underwriter will request this, as appropriate, from the customer or their GP. It is essential that you fully disclose all information (if not, you could compromise a future claim payment).

Terms can be offered on over 98% of all applications for life insurance although some will be on the basis of an increased, or rated, premium.
Factors that can lead to a rating are an adverse medical history, family history, habits, height/weight, occupation, pastimes and residence/travel.


What happens after I agree to go to policy?

HSBC will issue their M&S life insurance policy documentation, set up your direct debit mandate and issue you with "your rights to cancel" paperwork. If you change your mind and wish to cancel your policy within its first 30 days, any premiums paid will be refunded to you.

You can gift ownership of the policy to a third party (by assigning it) at any time. You may also place it under trust which will ensure a quick payment of any policy proceeds can be made without having to await probate, following the life assured's death. A trust also keeps the sum assured outside of the deceased's estate for inheritance tax purposes.

If a claim needs to be made (on death or diagnosis of a terminal illness) contact needs to be made with HSBC who will issue a claim form to the appropriate person (which could be a surviving joint policyholder, executors or trustees) and they will make sure the money is paid out (on a valid claim) as quickly as possible.

Don't worry about HSBC going bankrupt and not being able to pay out. It would be likely that another party would buy their complete book of life policy business, should they experience problems but, failing that, there is the State backed Financial Services Compensation Scheme which guarantees 100% of the first £2,000 of the sum assured and 90% of the rest.

Conclusion

I'm sure all Dooyoo members will recognise the importance of having sufficient life insurance cover. None of us like to think about dying but we need to try and ensure that the loved ones who we may leave behind are financially secure - a role that life insurance can fulfill.

M&S are a reputable brand. They have negotiated a good priced product with HSBC and there are no obvious disadvantages buying this product (if it's what you need). That said, for life insurance, you would be best advised shopping around to make sure you get a good deal - for many of you, M&S will offer a competative premium

Summary: A no-nonsense life insurance offering