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      28.01.2009 10:35
      Very helpful



      A good life assurance product with varying options of cover

      When I went from being a dull corporate permanent employee to being a dull freelance consultant, it prompted a review of my finances. When you are employed permanently, you very often take for granted things like a pension scheme, life insurance, sick pay and so on and then suddenly, you're all on your own and all those benefits are gone. As a freelancer, critical illness cover was one of the most critical (ahem) matters for me to resolve as, if I were to become very ill and unable to work, the bills would still need paying. I've also become dreadfully pessimistic about working in London and have convinced myself that I will almost certainly be involved in a terrorist attack, will lose several limbs and/or will die horribly. As such, I need good life cover to ensure that my estate is catered for when Al Qaeda finish me off once and for all.

      Skandia is a Swedish financial institution that specialises in long-term savings and investments and protection products, like life assurance and critical cover. Their largest operation is in the UK, and, although I've limited experience of the financial market, I know from dealing with financial advisors that Skandia has a reasonably strong reputation. Indeed, my financial advisor recommended their products to me, on the basis of their flexibility and value for money. Skandia products can only be purchased through a financial advisor, as is often the case with these providers. This gives them more strength to advertise that their products are recommended independently, although anyone who knows anything about the market will know that financial advisors are easily influenced so ensure you are fully appraised of the facts. My financial advisor is not limited to certain partners and is therefore free to recommend whoever she feels is best for me. Skandia is part of Old Mutual plc, which has a broad international base and strong financial performance. They are regular award winners and rate very highly across the board so I was reasonably confident that I was doing business with the right people.

      Skandia Protect is a protection plan that offers varying degrees of cover, customised to the solution that best suits you. It was a good match to my requirements, because it provides a cash sum on death or if I suffer from a (listed) critical illness. I went for a very comprehensive policy and built in benefit for permanent disability benefit, premium protection and a total benefit package that automatically increases the benefit with inflation. The policy is renewed in ten-year blocks, which means that the premium is guaranteed for that time, but may/will increase once a decade. This works well for me. It means that I know how much I am paying for a substantial period of time, and provides the reassurance that I will be covered for pretty much any critical eventuality. It's not cheap but in comparison with other providers, the level of benefit is more significant. They've also just announced that from February, their premiums will be reduced by 17.5%. Skandia are also one of the better providers for cover for interim/self-employed personnel, with other providers more reluctant to take you on unless you are a permanent employee.

      Skandia's Critical Illness benefits are some of the strongest on the market. They have just reviewed the list of critical illnesses that are covered and increased it to more than 30, including cancer, stroke and heart surgery. They provide cover for early forms of both prostate cancer (increasingly common in men) and breast cancer, which is quite rare in the market. They also pay out if I am hospitalised (28 days or more) after an accident. In terms of eligibility, you must be aged 18 to 60 at the start of the policy and you must be UK resident. If you have existing medical conditions, this is likely to have some bearing on your application. You may be "rated", which means that either the premium will be higher or you will be declined certain benefits due to existing health conditions. Whatever you do, don't lie. It may mean your costs increase, but you jeopardise your entire claim otherwise and trust me, the claims people will check everything.

      The application process was handled by the financial advisor and was, not surprisingly, very thorough. I was required to provide extensive details of my medical history, and attended a medical examination. I was surprised how long this took. From my initial application, it was four weeks until I was told I needed an examination, another four until it took place and another four until a decision was advised. This made me nervous; I was effectively without cover for twelve weeks, and I would have preferred a basic, interim cover that at least protected against accidental death for that time.

      Once the financial advisor had handled the initial application, all correspondence was managed directly by staff at Skandia. It was relatively simple, except for the details related to the payments and my bank account. Skandia were initially insistent that the Direct Debit should be paid on the first of the month. I prefer my payments to be taken on a certain date later in the month (more habit than anything) but eventually relented on the first, only to be told it would be the 20th (as per my original request.) This indecision actually required six letters from the Skandia support team and some time wasting that resulted in two premiums being taken in one month. I did, however, have to speak to support staff at Skandia twice in this time and was impressed. The staff members were extremely professional and knowledgeable and there was no rigmarole with call steering or complicated contact centre options. I did have to point out that some of the legal paperwork hadn't been sent through (I had no real summary of the policy conditions) but this was soon sent to me, once I had pointed this out. When the documents did arrive, they were surprisingly straight-forward. They wouldn't win a Plain Engilish Award but it was easy to find the key details.

      It's increasingly common to challenge a provider based on the funds in which it is investing. No details for this are available on the Skandia web site, which slightly undermines the corporate pledge to be transparent, and I would have to deduce that the investments are no more or less ethical than any other provider.

      There are some disadvantages to this policy. It has no cash-out value, meaning that cover only lasts for as long as I pay the premiums and if I stop paying them I get nothing back. It is also possible to become critically ill through a condition that is not listed, which, although rare, would be a financial catastrophe. As I've already stated, the premiums aren't cheap either.

      Nonetheless, having compared Skandia to a handful of other providers, I'm confident that I have the most comprehensive cover available at the best price. The flexibility of the policy is excellent and I really feel as though I have something tailored specifically to my requirements. I particularly like the 10-year review period, which will prompt me to review the cover and ensure that my "house is in order" should the worst happen.


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