Most life policies have optional extras, which include the following. A waiver of premium is one extra that is opted for. If you cannot follow your normal occupation because of illness or injury, the insurance company will pay your premiums to maintain the benefits under the policy. Critical illness occurs where the insurer provides cover against the risk of you having a serious illness such as a heart disease or cancer. If you develop one of the illnesses listed in the policy a lump sum (or occasionally a regular income for a set period) will be paid. This type of insurance can be bought on its own or as an addition to whole life, endowment or term insurance.

Provided your policy is a “qualifying policy” the benefits paid on death or maturity are not subject to income tax. To qualify, a policy has to satisfy certain statutory conditions. These include the need to pay premiums at annual or shorter intervals for at least 10 years or until your earlier death. Your sales person, adviser or insurer will tell you whether or not your policy is a qualifying one. The surrender of a policy within the first ten years may result in a liability to pay some income tax.

There are controls over selling life insurance. Sales are governed by the rules of the financial services regulator – the Financial Services Authority.

The Financial Services Authority as either a company representative or an independent financial adviser must authorise any person advising on or selling investments. The sales person will make his status clear and explain whether he is authorised to only offer the products of one company or whether he can advise on a range of different companies’ products. Insurance companies deal direct with potential customers either by telephone or through their sales people but it is also possible to buy through independent financial advisers or other insurance intermediaries.

A life insurance policy is a long-term commitment. It is not designed for you to cash in early. Insurance companies and other financial advisers can help you decide what products are suitable for you.

Never surrender a life insurance policy without taking expert advice. When you have decided on a policy you will have to complete and sign a proposal form. This form may ask about such matters as your age, occupation and health. You must answer all questions truthfully. If you fail to do so, it can, in some circumstances, mean that your policy will not pay out.

Every effort is made to ensure your application for life insurance is made in the full knowledge of all its terms and conditions, but all these policies have a “cooling off” period (of at least 14 days).

During this time you can tell the insurer you do not want the policy and receive a refund of any initial premiums you have already paid. With unit-linked policies it may not be the full amount you originally paid if the value of the units has decreased since purchase. If there is an issue you want to complain about, your first point of call would be the salesperson, adviser or Insurer. Your policy document will provide details of the insurer’s complaint arrangements. The aim will be to ensure that your complaint will be thoroughly investigated at the right level.

If you are not satisfied with the way your complaint was handled you can contact the Financial Ombudsman- who settle disputes between consumers and businesses providing financial services.