Choosing the right amount of cover on your life insurance policy is as important as deciding to get insured in the first place.  Too little cover and your surviving family may not have enough cover and too much cover can end up being expensive in the long run.

Quick Fire Answer

Here is a quick option for those who don't have a lot of time and are not overly concerned with details or saving money each month on premium.  One rule some like to use is that the sum of cover should be 10 times your annual income to  leave enough for your family to be comfortable.

But, if you are serious about saving money then you will need to sit down and crunch some numbers.

Serious Calculations.

 Depending on the state of your finances working out a figure for cover shouldn't actually take too long.  If you are the one taking out the policy then you need to consider the points below.

1. The cost of dying - how much will your funeral cost? 

If you don't want to call up the funeral parlour just yet then check out this site for a guide to some of the costs of your last hurrah.  http://www.whatprice.co.uk/health/funeral-cost.html 

2. Debts

Do you have a mortgage, loans or outstanding bills?  Will you need to pay these off for your surviving family?  Remember to consider inheritance tax too, especially if you are unmarried and have an estate more than £275,000.

3. Living

How much money per month will your surviving family need?  Consider in your absence how much income your partner could bring in and put this against the monthly costs of running the house hold.  If there are savings you may want to leave these untouched in case of unexpected bills or repairs to the estate.

 How long will the survivors need support for?  The term/length of your life insurance policy has a bearing on how much your premium will be.  If you have toddlers then you might want to support them until they are through school or higher education or if you have a non working partner then providing support for them for as long as they might need it.

4. Assets

If you have many assets then if might be an option to sell these in the event of your death to help with providing cash.

Other things to keep in mind

How old are you and what is the risk of death involved (is there any illness)?

How long do I need the policy for?

Do I have other life cover and does your partner have life insurance?

Spend the time

Planning for what will happen after your death especially if you have dependents is an important task so spend a bit of time deciding on the amount of cover you will need.  I'll discuss very soon the types of life insurance policies that you can get and what who they are designed to benefit.

If you have had a run in with your insurer and come out worse off what do you do and should you bother?

I'm constantly seeing letters and calls for help about insurance in the press and on forums.  It seems that despite insurance company efforts there are always cheesed off customers around.  Insurance is a sticky subject and no one likes having their claim turned down.  

Unfortunately, making complaints can be arduous and stressful for most of us.

It might not be be worth your time, effort and grey hairs but if you do have a genuine complaint then you should go for it.  It is important for any system to be tested and complaints are one of the ways to do this.  Your complaint could break ground for others who have the same problem and your work has helped can prevent it from happening in the future.

If you do want to make a complaint your first point of contact is of course your insurer.  Insurance firms provide a free formal complaints service.  Unfortunately, using these processes can be long and arduous so don't let them wear you down!  I know because I been in them on both sides of the fence!  There are timeframes within which the complaint should be handled.  If you think that it is going to be a long battle I recommend taking notes of when things happen and how long they take.  You are working with bureaucrats and it does help to think like one for the duration of the complaint.    

When you make a complaint I recommend making a phone call before writing a letter.  In some cases you can learn more about your complaint or perhaps have it resolved there and then.  Remember to keep the dates, times and names of who you talk to and use any information from phone calls in your written complaint.

Don't write an angry letter in the heat of the moment.  Cool your jets for a few hours or days and state your case as clearly as possible.  Make clear concise points for each of your grievances and if it's relevant refer to parts of your policy or dealings you have had with the firm. 

It can help to get to know the procedural time line too.  Look online at your insurer's site or call for a copy of the procedure if you don't have it.

In most cases Insurance companies and insurance providers are regulated by the Financial Service Authority and so they are bound to handle complaints in certain ways.  

Time lines should look a little like this:

1. Within 5 business days your written complaint should be acknowledged by letter.
2.  Contact as by complaint handler as possible after that or further letter will inform you of when you will be contacted.
3. If complaint unresolved within 4 weeks further contact regarding reason for further action.
4. Within 8 weeks a formal outcome is issued or a letter detailing when the investigation will be concluded.

If you have not had a satisfactory response, been convinced that you are wrong or received a completed investigation within 8 weeks you can complain to the Financial Ombudsman Service.  You also have the option of taking legal action.  It is up to you which route you go down at this point but the FOS are free and you still have the option of going to court after the FOS decision.  

For official government advice check out:

http://www.moneymadeclear.fsa.gov.uk/guides/complaints/making_a_complaint.html

Have you had an interesting complaint or dealing with your insurer? If you would like to share it pop a comment in reply to this article below.