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    • duckandweave
    • By duckandweave 12th Oct 16, 8:19 AM
    • 4Posts
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    duckandweave
    Life insurance at retirement point
    • #1
    • 12th Oct 16, 8:19 AM
    Life insurance at retirement point 12th Oct 16 at 8:19 AM
    I am married and a few months from retirement at 65. It seems prudent to have life insurance for each other. Previous policies have now expired. Does anyone have advice?
Page 1
    • Clifford_Pope
    • By Clifford_Pope 12th Oct 16, 8:35 AM
    • 2,963 Posts
    • 2,890 Thanks
    Clifford_Pope
    • #2
    • 12th Oct 16, 8:35 AM
    • #2
    • 12th Oct 16, 8:35 AM
    Presumably you planned your pension provision(s) so that the survivor would have an adequate income? If you still feel the need for life insurance surely that suggests that you haven't put enough in your pension?
    • dunstonh
    • By dunstonh 12th Oct 16, 10:47 AM
    • 85,122 Posts
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    dunstonh
    • #3
    • 12th Oct 16, 10:47 AM
    • #3
    • 12th Oct 16, 10:47 AM
    It seems prudent to have life insurance for each other.
    Why?
    Most people cease to need life assurance after retirement. What if you financial situation that means you have a financial need?

    Does anyone have advice?
    Advice is a regulated activity. The board is not regulated to give advice. Just discussion and comment. However, even if advice could be given, you havent told us anything about your situation that suggests a life assurance need. So, for us to "discuss" it further, we need more info.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • AnotherJoe
    • By AnotherJoe 12th Oct 16, 10:55 AM
    • 4,177 Posts
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    AnotherJoe
    • #4
    • 12th Oct 16, 10:55 AM
    • #4
    • 12th Oct 16, 10:55 AM
    I am married and a few months from retirement at 65. It seems prudent to have life insurance for each other. Previous policies have now expired. Does anyone have advice?
    Originally posted by duckandweave
    Only one that involves a time machine and taking out a longer term policy many years ago.
    Life insurance now would be very expensive.
    Why do you think you need it?
  • jamesd
    • #5
    • 12th Oct 16, 11:41 AM
    • #5
    • 12th Oct 16, 11:41 AM
    Consider why you need life insurance. Typically you would not need life insurance because your normal planing would have to include provision for sufficient income for the survivor after first death.

    Life insurance could be needed if you've gone and done things like blowing your money on an annuity instead of a combination of drawdown and state pension deferral.

    Life insurance could also be needed if something else means that one of the two has income linked to them being alive and the other would suffer financially after their death.

    Term life insurance can be very cheap at around state pension age for those in normal good health.
    • Silvertabby
    • By Silvertabby 12th Oct 16, 12:31 PM
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    Silvertabby
    • #6
    • 12th Oct 16, 12:31 PM
    • #6
    • 12th Oct 16, 12:31 PM
    Not necessary if you have paid off your mortgage and have sufficient pension income?
    • Kynthia
    • By Kynthia 12th Oct 16, 1:56 PM
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    Kynthia
    • #7
    • 12th Oct 16, 1:56 PM
    • #7
    • 12th Oct 16, 1:56 PM
    The insurance board on this forum might be a better place for this question as there may be other considerations than just pensions. I've heard some people get life insurance for a few years to cover the cost of inheritance tax should they die before a gift becomes exempt. So there may be reasons many of us wouldn't even think of.

    However generally people have life assurance policies that terminate at or near retirement as the financial need is gone. If you or your partner should pass what income are you losing that you need? If they were going to stop earning soon, the children are grown, the mortgage paid off, and the pension is inheritable (or 50% if a DB pension), then what is needed? If something is then get life assurance.
    Don't listen to me, I'm no expert!
    • duckandweave
    • By duckandweave 12th Oct 16, 7:28 PM
    • 4 Posts
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    duckandweave
    • #8
    • 12th Oct 16, 7:28 PM
    • #8
    • 12th Oct 16, 7:28 PM
    For "advice" read "thoughts".
    I have paid mortgage and comfortable pension in place. My thought were more of a "what if" in the event of my wife being left in receipt of 50% pension or unforseen need for funds (Medical etc).
    I am in good health. Maybe a simple term cover would provide a warm fuzzy feeling if not overly expensive.
  • jamesd
    • #9
    • 12th Oct 16, 7:42 PM
    • #9
    • 12th Oct 16, 7:42 PM
    Well, the first aspect of a potential 50% pension is avoiding her getting into that situation by not taking options that would give her only a 50% pension.

    If it's a final salary pension that's not avoidable for the final salary part but you may be able to use other savings and investments or downsizing or equity release to provide a higher income for her in other ways.

    If it's an annuity that would pay a 50% spousal pension an option might be income drawdown that would give her a 100% pension instead of 50%. And probably at a higher level than the annuity unless your health is poor.

    Another option might be deferring her state pension for perhaps ten years if her health is good. That would produce a substantial increase, 58% if she reached state pension age after 6 April 2016 or 104% if before. Increases per year of deferral are either 5.8% or 10.4%. The 10.4% one is mostly inheritable by you if she was to die first, the 5.8% one isn't inheritable. Well, ignoring the case of dying while still deferring.

    We don't really know enough about the overall circumstances of the two of you so while you're right to wonder about protecting her it's hard to comment usefully on how best to do it.
    Last edited by jamesd; 12-10-2016 at 7:46 PM.
    • duckandweave
    • By duckandweave 12th Oct 16, 10:23 PM
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    duckandweave
    Government pensions so no flexibility. Wife not entitled to uk pension as never worked in uk and dual nationality.
    • Kynthia
    • By Kynthia 13th Oct 16, 12:43 AM
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    Kynthia
    Government pensions so no flexibility. Wife not entitled to uk pension as never worked in uk and dual nationality.
    Originally posted by duckandweave
    So there's possibly a financial need. Perhaps talk to an IFA.
    Don't listen to me, I'm no expert!
    • atush
    • By atush 13th Oct 16, 9:19 AM
    • 15,315 Posts
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    atush
    Government pensions so no flexibility. Wife not entitled to uk pension as never worked in uk and dual nationality.
    Originally posted by duckandweave
    Did you never have children with CB payable to her? this would give her some UK pension.

    What about her country where she lived and worked? Will she get a SP from them (I will get a US SS pension, and a 19 yr UK pension). Is her country in the EU?

    Has she built up a private pension in her own name? She can contribute up to 2880 per year (which is grossed up to 3600 with TR) even if she doesnt work or have an income. Do you use her S&S isa allowance? These 2 measures would see her have income to suppliment the 50% pension. With the addition of providing funds for you should she predecease you.
    .
    • KNJ
    • By KNJ 13th Oct 16, 9:46 AM
    • 34 Posts
    • 11 Thanks
    KNJ
    I am not yet of retirement age, still 10 years to go, but last year took out life term insurance ( including critical injury ) up to my age 75
    Plans are in place that hopefully she will have access to our joint investments, house to her, etc however as like yourself, my wife holds foreign nationality, and I would hate to think that any transfer of those assets were delayed because she is not British, thus to avoid that I took out a 50k LA which should tide her over until all the red tape is sorted and pay for any funeral costs.
    • duckandweave
    • By duckandweave 13th Oct 16, 6:52 PM
    • 4 Posts
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    duckandweave
    Wife will have a few years of CB. Not checked details. S. American pension very difficult to verify and not transferrable. Overall, tricky to resolve and time to her retirement short hence original "thought" of maybe term ins may be a belt and braces good idea to cover unexpected eventualities.
  • jamesd
    Do check on the CB because if she's qualified for the state pension that can provide her with a lot of protection and quite possible many past years being buyable.
    • atush
    • By atush 14th Oct 16, 5:09 PM
    • 15,315 Posts
    • 9,190 Thanks
    atush
    She gets credits for NICs for each year she recived CB from the birth of the hcikdren until the youngest child reached 12. And if she started receiving CB before 2010-12 (not sure when it stopped) she also get s 3 extra years credit to cover ages 16-18 (i got this before they stopped it). She needs at least 10 years credits to get any UK state pension.

    She could, if she wanted, pick up a few more years credits by working part time.

    So get a state pension statement and forecast (2 different things) for each of you.

    And open a private pension for her. Free money.
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