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[MSE Wendy]

This thread relates to the article Life Insurance: Protect your family's finance article.

See old thread here.

Click reply to discuss.

[dunstonh]

While some may be worried that ‘cheaper isn't better' actually, with level term assurance, there's no investement element as the payout is fixed; and there's no argument over whether someone is dead so this is a truly simple policy in fact (and do forgive the virtual shouting for necessary emphasis)...

"It's a simple case of the cheaper the better!"

Is it?

Different term assurances have different features. Some of which are going to be of no use to many but can be useful for others. Some offer guaranteed insurability, some offer automatic cover for children, some can be extended/amended, some cannot. Some allow amendments to the people covered, when critical illness is bolted on there can be bigger differences in what is and isnt covered, some cover war risks, some dont, disability options vary with providers.

Often with the difference being quite minimal in the top 5 priced companies, it is worth seeing what features/exclusions are in place to see which is best to go with.

There are also a couple of providers that are yearly renewable term assurances which tend to appear top of the list when getting term assurance quotes. It is a very common error for people to buy one of those thinking its a level term assurance without realising it is a yearly renewable term.

[xanthej]

I'm 34, single and have had my flat for four years. When I bought it I was sold life insurance and critical illness cover. I keep hearing that if you don't have any dependants you don't need it. Is that really good advice? And if it is can I stop my policy at any time? Also, is it likely to be a term of my mortgage to have it? Hope someone can answer. Thanks.

[Willman Rodders]

In reply to xanthej's post life cover would serve you no benefit persnally at the moment. If you were to die then your property would be sold and the proceeds used to clear your liabilities. Critial illness and income protection are important for the single person though.

Are you circumstances likely to change in the future? Are you going to cohabit? marry? have kids? If you are it might be worthwhile retaining the life cover because the premiums your paying now were bought at the level when you took out the policy. Now older, your premiums will be higher to obtain the same level of life cover and more expensive still in the future.

Before rushing in and cancelling the policy you need to check out if the policy is linked to the critical illness policy. Conditions of payout for these polices has changed, and by cancelling this policy you may loose out on valuable cover.

My recommendation: see in Independant financial adviser who will explain your options.

[flutterby_lil]

Can anybody recommend companies for income protection? i have life cover with sainsburys with free critical illness and am looking to take out an income protection policy to cover mortgage and a loan we have, thanks in advance, all suggestions welcome

[dunstonh]

Can anybody recommend companies for income protection?

Not without knowing any facts. Permanent Health insurance is an area where providers differ quite a lot with their offerings. Plus you have various levels (budget, standard and comprehensive) but they don't clearly define what their level is. Occupations and disability are handled differently by different companies as well. Its easy if you have the research tools but it isn't going to be easy if you don't and don't know much about the product.

[advent]

I have been advised to take out life insurance on my (almost) ex husband to safeguard payments that he is responsible for (although if he defaults on the payments i would become responsible for) over the next 4 years. I need to cover about £8000 in the event of his death. Do you have any suggestions?

[dunstonh]

family income benefit would be cheapest option for that. You as owner and him as life assured

Remember that any life assurance you take out would need his signature.

[advent]

family income benefit?

[dunstonh]

Its the cheapest type of life assurance and pays an income instead of a total sum assured. As the need here is income replacement, then the family income benefit is the product that fits that need.

[Bethan1978]

Hi there,
I am going totake out an £8000 loan, however, do i need the payment protection they offer, which brings the repayments up? I work for a company that pays 6 months full pay and 6 months half pay if sick and also has a £10,000 death in service benefit. Is there a better place to get the protection i will need for the 4/5 yrs i will be paying back the loan? Im very confused with the level term life insurance notes, but have askedfor a quote from cavandish as noted on the site? but dont want to rush into buying something that is not suitable. Thanks

[Giles Helbert]

I have two questions that someone may be able to help me with. I have recently had a competitive quote from Cavendish for Joint Life Cover with my wife. On reading all the Key Facts etc. I realised it was valid for the first death only. I then did two single life quotes and the difference in cost was pretty minimal. Am I missing something here or would I be stupid not to take the two single life policies rather than the Joint Policy?

My second query is that I went for a Guaranteed Increasing Benefit. I understand that the benefit increases by RPI. On reading some of the detail I notice that the premium will increase by RPI x 1.4. In other words the premium will be increased by a factor of RPI x 140% which seems pretty steep. It obviously makes minimal differnce in the early years but by the latter stages there is quote a hefty increase in premiums. Is this fairly standard with Increasing Benefit? I have some PHI and both the benefit and premium increases by RPI.

If anyone has any ideas on the above please let me know!!

Thanks

[cmhbyandco]

Hi,

My partner & I have just taken out a joint mortgage which was solely in my name to begin with. I had life insurance to cover the original amount & when we applied for life cover to protect the rest of the mortgage & I was turned down.

I have suffered from depression since 1999 & was hospitalised in that year due to being suicidal because of my illness & they have turned me down because of this.

Now I do not know what to do.................my partner is covered but not myself.

Any advice????

[rabbit27]

I have a past history of using a class A recreational drug, this was a bad time in my life which i regret fully and in no wey shape or form do i have anything to do with drugs now !
The problem i have now is that no insurance company will give me any level term insurance because of my past and i am now worried as i now have a 2 year old daughter and she would be left with nothing if something should happen to me please help !

Kind Regards

Rabbit27

[upbeat]

I have life cover which will pay off my mortgage should I die. I don't have dependants living at home. I was wondering if critical illness policy would be more beneficial. I find this whole area overwhelming and a minefield. I have PPI which pays my mortgage for one year should I become ill. What are the best critical illness policies with life cover attached. Perhaps this is the way I should go.

[dunstonh]

Originally Posted by upbeat

I have life cover which will pay off my mortgage should I die. I don't have dependants living at home. I was wondering if critical illness policy would be more beneficial. I find this whole area overwhelming and a minefield. I have PPI which pays my mortgage for one year should I become ill. What are the best critical illness policies with life cover attached. Perhaps this is the way I should go.

PHI is probably a better option.

[Gman84]

Hi all, I am hoping one of you great people can give me some advice.

I'm looking to take out life insurance for my mother-in-law. She is 61 and has no kind of life insurance. Basically, we are looking for something to protect us should (god forbid) pass away.

She can not afford to insure herself as she is now retired and on a small pension so we have offered to pay because at the end of the day, should she pass on, it would be left for me and my wife to sort things out.

I know there are plenty of insurance firms out there specialising in mature people's life insurance but rather than messing around getting her to do the policy then passing her the money each month to put in her bank, is there any firms that allow you to do this?

I've tried googling but whilst this seems a common practice in America, it seems unheard of here (maybe I'm using the wrong key words).

Any help or advice is gratefully received.

[dunstonh]

Hi all, I am hoping one of you great people can give me some advice.

Life assurance is regulated and there is no way to give advice on the forums without breaching FSA rules (and some board rules as it would put the board at risk).

I know there are plenty of insurance firms out there specialising in mature people's life insurance but rather than messing around getting her to do the policy then passing her the money each month to put in her bank, is there any firms that allow you to do this?

You cannot insure someone elses life unless you have an insurable interest and they sign to agree it. I cannot see that you have an insurable interest and therefore would not be able to take out a policy on her life.

[upbeat]

Originally Posted by dunstonh

PHI is probably a better option.

Would you mind explaining a little bit about what PHI is. Many thanks

[dunstonh]

PHI = permanent health insurance.

It is proper income protection. It is underwritten to your circumstances (unlike ASU/MPPI), it cannot be cancelled by the insurer and can go on paying out until retirement (assuming you are ill that long).