Cuna Mutual has launched this new life insurance product in conjunction with The Co-operative Life Planning.
The plan is available direct through the website or by phone, and also through building societies and credit unions across the UK.
FuneralProtect+ is a guaranteed acceptance whole life policy that gives customers a choice of guaranteed sums insured of between £2,000 and £6,000 per insured person. Unusually, it can cover up to 12 family members. Premiums start at just £2 a month and depend on age and sum insured. A customer aged 50-59 would pay £7.00 a month for £2,000 of cover, while someone aged 30-39 would pay £3.00 a month. A customer aged 60-69 would pay £13.00 a month. Premiums are pro rata for higher sums insured. Under 18s are covered free of charge.
Premiums and sums insured are set at outset and are guaranteed for life. Acceptance is also guaranteed – up to age 70 – with no medical or health questions. Full benefits are payable on death after six months.
Applicants must be aged under 70 and must be resident in the UK. Older applicants may be accepted, but at Cuna Mutual’s discretion.
During the first six months of the policy (or following any subsequent increase to an existing plan) no benefit is payable, except in the case of accidental death. After six months the full sum insured is paid on death.
Benefit is paid automatically (using a charge on their favour) to Co-operative Funeralcare to pay for the life insured’s funeral, with any positive balance being paid to their estate. Or, if other lives insured remain alive, any balance goes to the policyholder (if alive) or their spouse (or significant other), parents or children, in that order.
Within the same policy, a spouse or significant other, parents and children can all be covered, up to 12 lives in total, although grandchildren are not listed as being includable. The policy is written as a whole life policy, and can run until the last person insured dies.
What They Say
Cuna Mutual CEO Paul Walsh said: “We will be offering a softer side of protection that allows people to consider all funeral aspects for themselves and remove emotional strain by allowing them to think about what they want for themselves and their family. Although attitudes are changing in the UK, there is still a long way to go to match our continental colleagues’ openness to discussing funerals. Cuna Mutual brings a wealth of experience in providing financial support for surviving dependents and through partnering with The Co-operative Funeralcare for FuneralProtect+, policyholders are connecting the family with the largest funeral home network in the UK.”
What We Say
Guaranteed acceptance policies have become increasingly popular in recent years, making up over 90% (by sales) of all whole life plans currently. The big advantage is that both acceptance and premiums are guaranteed. They are marketed mainly to the 50+ age group.
The downside is that such plans can offer poor value – especially if you die very early (within six months on this plan), or start at an older age and then “live too long”. In fact, for someone in their 60s dying before their normal life expectancy, the family could still get back less than had been paid in.
This plan links in with the Co-op, so making organising the funeral very easy, and the fact that up to 12 family members can be covered under the same plan may appeal to some. The plan is not marketed through IFAs, but clients can apply direct.