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Life insurance is used to provide a lump sum if you die. The money can be used for anything but is normally used to pay off a mortgage, to provide child care or to ease the financial pressures should the worst happen.

There are two main types of policy:

Term Life
This type of policy runs for a specific period of time which you can choose. After this period of time the policy ends and the cover stops. If a claim has not been made by the end of the specified time period there is no payout.

Whole of Life
This type of policy runs until you die so there is always a payout as long as you keep up the payments.

It is important you choose the right policy, the costs, benefits and risks of each and how the money will be used.

Our life cover is provided by Cignpost Life and is a Term Life policy.

Life insurance could help protect your loved ones lifestyle if you were to pass away. A lump sum payout (also known as the cover amount) would be paid if you were to pass away while you have the policy. This could be used to pay your mortgage, rent or other bills, giving you some peace of mind that there would be one less thing for them to deal with.

It is typically taken out by people with dependants, whether that’s a partner, children or other loved ones, who could be impacted financially if they were to die.

This depends on the type of policy you take out. People with a repayment mortgage often choose a decreasing term life policy, which is cheaper because the amount of cover reduces over time with the outstanding balance on your mortgage. A level term policy, where the amount of cover remains the same throughout the term, might be better to fit your needs over time.

Premiums for level or decreasing term policies won’t change throughout the length of your policy, unless you make changes to your cover amount or choose to take out the increasing cover option. If You have chosen increasing cover, your premiums will increase by 3.75% on each Plan Anniversary. To find out more please view our product terms and conditions and key features document.

The amount of cover you need will depend on your own personal circumstance, there is no one-size-fits-all answer. The factors you may need to consider include covering;

  • Mortgage or rent payments
  • Any other loan or debt repayments
  • Household bills
  • Education and childcare expenses
  • Loss of income

If you are using the policy to cove a mortgage then you may want the policy term to be the same as the remaining length of you mortgage

If you are using the policy for family protection people often choose a term that provides cover until your children reach independence. The choice is yours.

There’s different types of life insurance; they all aim to offer financial protection for when the policy holder dies and offer slightly different types of cover.

  • Level term life policies – The payout and cover stays the same throughout the amount of time you are insured for. Put simply, you decide the amount of cover to take out and that’s what the policy pays. This is often taken out for families, who want to cover for costs such as protecting their families lifestyle or child care costs as well as monthly outgoings such as a mortgage.
  • Increasing term life policies – as the name suggests, this increases the payout the longer the policy runs. The cover amount increases each year by 3% and your premiums increase by 3.75% each year to pay for the increased cover and age. The increasing option helps to provide some degree of protection against the risk of inflation.
  • Decreasing term life policies – the cover amount decreases each year to pay off an outstanding mortgage or loan by the end of the term based on an interest rate of 8%. This is because your debt should be decreasing as you repay it over time. If you claim, the cover amount should pay off your outstanding repayment mortgage (or loan), provided that:
    1. The cover amount at the start of the plan is at least the amount of your repayment mortgage or loan
    2. You keep your mortgage (or loan) payments up to date
    3. Your mortgage (or loan) interest rate does not go above 8% a year. If interest rates are less than 8%, the cover amount could be more than required to settle your mortgage (or loan).
    Your premiums will remain the same throughout.

Some employers provide death in service benefits. This means employees’ beneficiaries receive a tax-free lump sum if the employee dies while employed by the firm. Often, the benefit is linked to being part of the company pension scheme. You would need to check the scheme rules to see if this benefit applies to you and if so, how much the lump sum would be. It is possible the amount will be lower than the cover needed to provide for your family, and it cannot be assigned to repay a mortgage.

If you change employer, the benefit is lost so to maintain cover you would need to set up a separate policy. As you get older the cost of life insurance increases and if your health deteriorates then the cost will increase further. If you need to leave work due to ill health, you may not be eligible for a policy at the time you need it.

Death in service benefits often don’t give you the flexibility needed to fit your personal circumstances, so it is important to check with your employer if you think you may have this benefit.

Life insurance can be purchased as a single policy which covers one person, or a joint policy which covers two people.

Single life insurance policies run for the length of time you take out cover for or until you make a claim. Joint policies have two different types; firstly, a ‘dual’ policy will run for the length of time you take out the policy for or until both policyholders make a claim. A ‘first death’ policy would end when either policyholder made a claim, meaning the remaining policyholder would receive the payout but would be no longer covered under the policy themselves.

Please note, our joint policy option is a ‘first death’ policy.

It will depend on your circumstances whether a single or joint policy would suit your situation.

The payout isn’t currently liable for Income tax or Capital Gains tax. However, if your estate is large enough, there may be an inheritance tax liability. This could change if the legislation changes.

We understand that life insurance can seem complicated and time consuming. Llama Life Term Life can be purchased online in just 5 minutes with only 5 yes/no medical history questions. Providing an instant decision with no medical required, Llama Life provides quick and simple cover that is easy to understand.

Llama Life was created with the aim of getting more people covered. The cover is arranged by Albany Park, who is regulated by the Financial Conduct Authority. We offer Term Life and Critical Illness products which are administered and underwritten by iptiQ Life S.A. UK Branch. In providing these products, Cignpost Life act on behalf of the insurer.

Llama Life can be purchased online in as little as 5 minutes within just 4 simple steps. Llama Life Term Life has just 5 simple yes/no medical history questions and if you choose to add Llama Life Critical Illness there are 5 additional questions to understand your eligibility. It’s important that you answer these questions truthfully and accurately, to ensure your cover is not affected.

Llama Life is one of the fastest ways to obtain life insurance available. We ask just 5 simple questions which means you could be covered instantly without the need to talk to anyone.

Llama Life Term Life can offer cover for residents of the UK (excluding the Channel Islands and Isle of Man). Our online product is available for customers aged between 18 and 56 who are looking to purchase up to £250,000 of term life insurance.

A claim can be made by calling us on 0330 123 3747 or by writing to us at: Freepost Cignpost Life Customer Service.

Once we are aware of a claim, our experienced team will keep you updated at each stage, to make it as simple and hassle free as possible.

Once you make a claim with us, one of our claims experts will inform you of what information you need to provide based on your situation. Initially they will need:

  • Name of claimant
  • Policy reference
  • Details of the claim
  • Confirmation of your identity

We may need other information or documents depending on the circumstance; we are here to help answer any questions you have on making a claim, however big or small so please call us on 0330 123 3747. For more details please see our

We aim to get claims paid as quickly as possible; it generally takes one month or less**, depending on the complexity of the claim and how long it takes for documents to be sent across. We aim to transfer money within seven days of receiving all the paperwork, this could be sooner depending on bank processing time.

We understand each claim is different, so we investigate each one individually meaning you can relax knowing your claim will be given our full attention.

A summary of the conditions covered by Cignpost Critical Illness looks as follows:

  • Aorta graft surgery – for disease
  • Aplastic anaemia – resulting in permanent symptoms
  • Bacterial meningitis – resulting in permanent symptoms
  • Benign brain tumour – resulting in permanent symptoms
  • Benign spinal cord tumour
  • Blindness – permanent and irreversible
  • Cancer – excluding less advanced cases
  • Cardiac arrest – with insertion of a defibrillator
  • Cardiomyopathy – of specified severity
  • Coma – with associated permanent symptoms
  • Coronary artery by-pass grafts
  • Deafness – permanent and irreversible
  • Dementia including Alzheimer’s Disease – resulting in permanent symptoms
  • Devic’s disease (Neuromyelitis Optica) – with persisting symptoms
  • Heart attack – of specified severity
  • Heart valve replacement or repair
  • HIV infection – caught from a blood transfusion, physical assault or accident at work
  • Kidney failure – requiring permanent dialysis
  • Liver failure – of advanced stage
  • Loss of a hand or foot – permanent physical severance
  • Loss of speech – total permanent and irreversible
  • Loss of the physical ability to look after yourself
  • Major organ transplant – from another donor
  • Motor neurone disease – resulting in permanent symptoms
  • Multiple sclerosis – with persisting symptoms
  • Open (structural) heart surgery – with surgery to divide the breastbone
  • Paralysis of a limb – total and irreversible
  • Parkinson’s disease – resulting in permanent symptoms
  • Respiratory failure – of advanced stage
  • Stroke – resulting in permanent symptoms
  • Third degree burns – of specified severity
  • Traumatic brain injury – resulting in permanent symptoms

A smaller additional lump sum may also be payable on diagnosis of certain critical illnesses which aren’t covered by the main list of critical illnesses. This is called Llama Life Additional Critical Illness Cover.

Full details on the conditions covered can be found in our product terms and conditions.

Llama Life Additional Critical Illness Cover is included with Llama Life Critical Illness automatically.

The additional payout is the lower of 25% of your Llama Life Critical Illness cover amount or £25,000. This doesn’t reduce your Llama Life Critical Illness cover amount and it will only be paid once for each person covered.

The additional critical illnesses included are:

  • Low-grade prostate cancer 
  • Carcinoma in situ of the breast – with surgery to remove the tumour 

You can find the full definitions of the illnesses covered and the circumstances in which you can claim in our product terms and conditions.

A claim can be made by calling us on 0330 123 3747 or by writing to us at: Freepost Llama Life Customer Service. Once we are aware of a claim, our experienced team will keep you updated at each stage, to make it as simple and hassle free as possible.  

Your Critical Illness insurance will end when a claim for the full Critical Illness cover amount is paid. If you have a joint policy, the Critical Illness insurance will end for both policy holders when the first Critical Illness claim is paid.

Your Llama Life Term Life policy is not affected by a Llama Life Critical Illness claim. If you have any questions around how to make a claim or what happens next, please get in touch with our experienced advisers on 0330 123 3747.

Once you make a claim with us, one of our claims experts will inform you of what information you need to provide based on your situation. Initially they will need:

  • Name of claimant
  • Policy reference
  • Details of the claim
  • Confirmation of your identity
For Llama Life Critical Illness claims, we will require medical evidence from a qualified doctor from the United Kingdom or any country in the European Union, Switzerland, Iceland, Norway, USA, Canada, Australia, New Zealand, the Isle of Man or the Channel Islands. We will act reasonably if evidence is presented from other countries – our claims experts will talk you through the process so it’s as stress free as possible.

We may need other information or documents depending on the circumstance; we are here to help answer any questions you have on making a claim, however big or small so please call us on 0330 123 3747.

Llama Life Critical Illness includes cover for your children, up to the age of 18 (or 21 if they are in full time education).

We all hope it won’t happen, but this means that if your child were to be diagnosed with one of the conditions listed in our product terms, we will pay the Children’s Critical Illness cover amount of £25,000 or 50% of your Llama Life Critical Illness cover amount.

The Children’s Critical Illness cover amount can be claimed once per child, for up to 3 children. This will not affect your Llama Life Critical Illness cover.

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