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Insurance Risk

Insurance Risk

There are certain risks associated with insurance contracts. We point out some of the major risks below which we would urge you to consider seriously before committing yourself to an insurance contract.

  • If for any reason you cease contributions, the cover will lapse.
  • The advice provided to you is based upon the information you have disclosed, and you will be given copies of all declarations made, prior to the policy being put into force (or at least shortly after) to ascertain that the information is correct. Please check the information carefully and ensure that you make us aware if any alterations are required.
  • Failure to correctly disclose any adverse medical or other information requested by underwriters to an insurance contract may void your policy.
  • Life Insurance benefits will usually be added to the value of your estate unless they are written under the trust. Please ensure you discuss with your adviser whether your policy should be placed under trust at outset or not.
  • Insurance policies can have a level or reducing sum assured, premiums may be level or increasing, premiums may also be guaranteed or reviewable. Please ensure that you discuss with your advisor the effect that these variances may have on affordability and value over the longer term.

Financial Services Compensation Scheme (‘FSCS')

The FSCS was set up under the Financial Services and Markets Act 2000 and exists to protect clients of FCA authorised firms. It covers Mortgage advising and arranging up to £85,000. The Scheme can pay compensation to clients who have lost money as a result of their dealings with FCA authorised firms that are unable to pay claims against them, usually because they are insolvent or have stopped trading. Buy to let mortgages and non-regulated contracts and may not be covered under the FSCS scheme or by the Financial Ombudsman Service (FOS). It is therefore important that you understand and are aware if your investment is a ‘regulated contract’ or a ‘non-regulated’ contract.