Cash Q&A: Life insurance and families

I TOOK out life insurance about six years ago, but I now have more children and I suspect that the level of cover is well below what my family would need in the event of my death.

What should I do about this?

KS Anstruther

THE first thing to do is to check whether there are any options within your existing contract that allow you to increase the amount of life cover you have, without having to provide evidence of your health. This is important if your health has deteriorated since the plan was taken out.

If you are in good health you should be accepted for a new policy with an insurance company to give you the correct level of cover. You have the option of either taking out a top-up plan or replacing the original contract.

In recent years, life insurance costs have fallen due to increased competition and longevity. So even though you are six years older, you could find that replacing your existing cover is cheaper than keeping it in place. You will also need to decide how long you will need the policy for and what additional benefits you want.

Once you have decided on the level of cover and the features to include, shop around to find the policy that is best value for money. Taking out life insurance should be a fairly painless and simple process.

You can do this by contacting insurance companies direct or by using price comparison websites.

Alternatively, you can ask an independent financial adviser to do it for you and they will work on your behalf to find the most competitive premium at your chosen level of cover.

Finally, if you are replacing existing cover, make sure that your new policy has been accepted and is in force before cancelling the old one.

• Jason Hemmings is a partner at Cornerstone Asset Management LLP.

• If you have a question you need answered, write to Jeff Salway c/o The Scotsman, 108 Holyrood Road, Edinburgh EH8 8AS or email: [email protected].

The above is for general purposes only and is not tailored for individual use. It does not constitute legal, financial or investment advice on any particular matter and must not be treated as a substitute for specific advice. No action should be taken in reliance of the information given. The Scotsman Publications Ltd and Cornerstone Asset Management LLP accept no liability on the basis of this article