Life Insurance questions

born4thesurf

I am thinking of buying Post Office Life Insurance - does anyone have any advice?

dunstonh

Its life assurance. Its another incorrectly named product from PO (Their growth both is the other).

This board isnt allowed to give advice and the post office wont give any. So, what advice were you after?

Wutang_2

born4thesurf wrote: »

does anyone have any advice?

you are just asking for trouble!!

Tighthead

I always thought that "insurance" refers to providing cover for an event that might happen (fire, theft, flood, etc.), while "assurance" is the provision of cover for an event that is certain to happen. The meanings have been blurred and we tend to interchange the words whilst meaning the same thing.

As far as life cover is concerned, I would always speak to an independent financial advisor (multi-tied at worse). If you do comparisons online, usually supermarket providers work out as being the cheapest, and like the Post Office (I think) don't include benefits like Waiver of Premium. Nor does this guarantee you're actually getting the right cover, and on the right basis e.g. Level Term for interest-only mortgage, Family Income Benefit for income for the family, use of trusts etc.

An IFA will tell you his or her fee, or work on commission, and the premium will be more or less the same as if you applied direct - sometimes cheaper. They'll also tell you which insurers have the best track record for payment of critical illness (if included), and the best insurers if you have a particular medical condition.

If you pay a fee to the IFA, ask about rebating commission to reduce your premium. Be prepared that if you work on a commission basis, to sign a disclaimer that says you will have to pay the IFA a fee if you cancel within the first few years and the insurer reclaims his/her commission. Quite common practice.

At the end of the day, you buy life insurance for peace of mind. Isn't it better to go the whole hog and do it properly for absolute peace of mind, and certainty you're doing it right?

dunstonh

I always thought that "insurance" refers to providing cover for an event that might happen (fire, theft, flood, etc.), while "assurance" is the provision of cover for an event that is certain to happen. The meanings have been blurred and we tend to interchange the words whilst meaning the same thing.

That is correct in the UK sense. So, assurance is the correct term as you are going to die. You just dont know when. Americans though call it insurance across the board and its the Americanism of the English language that causes the confusion.

The Post Office tend to deal with the bottom end of the market and dumb down their literature to suit that market. Something I personally think is wrong.

you are just asking for trouble!!

With all the hassle Martin got on a non-regulated product, could you imaging what it would be like on regulated products/areas like this

If you pay a fee to the IFA, ask about rebating commission to reduce your premium. Be prepared that if you work on a commission basis, to sign a disclaimer that says you will have to pay the IFA a fee if you cancel within the first few years and the insurer reclaims his/her commission. Quite common practice.

Its not that common to sign a disclaimer and it is generally frowned upon when its done unless it is part of a fee agreement where the commission is being used to pay a fee. That is fine and it can work out very good value. However, a disclaimer to allow the adviser to claim full commission if you cancel is disgraceful behaviour and should be stamped out.

Tighthead

"So, assurance is the correct term as you are going to die. You just dont know when."

Not in this case. It's not assured that you will die during the term of the policy. Whole of Life is assurance, Term is insurance.

"Its not that common to sign a disclaimer and it is generally frowned upon when its done unless it is part of a fee agreement"

That was more the sort of situation I was alluding to!

"However, a disclaimer to allow the adviser to claim full commission if you cancel is disgraceful behaviour and should be stamped out."

Agreed!

OshayAway

Tighthead wrote: »

Not in this case. It's not assured that you will die during the term of the policy. Whole of Life is assurance, Term is insurance.

Dunstonh is correct, strictly speaking it is 'Term Assurance'. The fact that it covers a term is not relevant because the word relates to the occurance of the event not the claim. Otherwise the term (for want of a better word) "Term Assurance" would not exist, or you could consider it an oxymoron if that make you feel better.

be a Depeding how you look at it, it doesn't make a lot of sence but there you go.

I must say though that the insistance on using one term over the other seems a little pedantry.

Tighthead

OshayAway wrote: »

I must say though that the insistance on using one term over the other seems a little pedantry.

Yesh. Well he started it!:p

dunstonh

I must say though that the insistance on using one term over the other seems a little pedantry.

True but equally look at the mess other areas have by companies using the wrong term. "Bond" is so mis-used now that when someone says they have a bond you dont have a clue what that is. The savings forum is full of people posting about bonds when they are really fixed term deposits. Bonds have different taxation, come under different FSCS protection limits and are a totally different produce. Single Premium whole of life assurance plans become bonds (although their generic name is a mouthfull!). Structured products became bonds. Now fixed term deposits. The post office call their fixed term deposit a growth bond. It isnt a bond and it certainly isnt growth as its taxed as income, no capital gains.

It's no wonder consumers get confused when marketing departments are quite happy to use the incorrect naming of products.

Too many areas get dumbed down for convenience or Americanised (or is that Americanized )and whilst it can appear pedantic trying to keep the correct terms used, I think we should try and keep our standards.

...reading that back I have just realised that I must be turning into a grumpy old man early I remember, when I was young..........

payless

If you are using he term "bond" .. then of course you should read http://www.moneymadeclear.fsa.gov.uk/products/investments/types/asset_classes/bonds.html

and
http://www.moneymadeclear.fsa.gov.uk/products/investments/investments_jargon_buster.html