help needed for my mum 16 March 2006 at 10:19AM in Over 50s MoneySaving 5 replies 908 views

loopylisa

hi all im not sure if im in the right part but.....my mum wants me to look into life insurance/assurance but i dont know the first thing about it!!! shes wanting a lump sum paying out to me when the worst should happen. shes in her early 50s with no estate no savings and her health could be better but not ats its worst!! any ideas what she needs and whats the difference in insurance and assurance?? she has no partner and i dont live with her im 25 with my own children.
any help and advice is needed
thanks

margaretclare

Hi Lisa

Have a look here:

http://forums.moneysavingexpert.com/forumdisplay.html?f=21

Better if your mum looks into this for herself - only she knows what she really has in mind and how much she can afford (i.e. premiums per month). I think what she's talking about is level term life assurance.

I think the difference is: insurance is something that may happen - car accident, burglary, those kind of things. Assurance is something that definitely will happen - death!

I used to have one of those type of plans that you see advertised - June Whitfield etc - for older people. In the end I decided it was expensive and what I was paying, approx £22 a month for a £5000 pay-out - was a waste. I stopped that plan and started putting the money into savings instead. A cash ISA might be a better idea - at least it's growing, you can put in what you can afford, not committed to a set amount to a life assurance company month after month which is of no benefit to yourself (i.e. your mum).

Best wishes

Aunty Margaret

cattie

My friend who is aboutthe same age as your mother has recently been talking about taking out some kind of insurance so she can leave something to her children. She hasn't a bean to her name & I've tried explaining to her that she's left it a bit late to try to build up a decent inheritance for her children & advised her to try to put the maximum she can into an ISA each month.

As you mention your mother has no savings, she obviously isn't in a position to be puttting a great fat sum away each month & certainly would be better to put her money into an ISA rather than consider taking out expensive life insurance at her age.

margaretclare

cattie wrote:

My friend who is about the same age as your mother has recently been talking about taking out some kind of insurance so she can leave something to her children. She hasn't a bean to her name & I've tried explaining to her that she's left it a bit late to try to build up a decent inheritance for her children & advised her to try to put the maximum she can into an ISA each month.

As you mention your mother has no savings, she obviously isn't in a position to be puttting a great fat sum away each month & certainly would be better to put her money into an ISA rather than consider taking out expensive life insurance at her age.

Oh dear, why won't they think of something for themselves instead of being bothered about 'leaving something to your children'?

Everyone needs a bit of savings - at the very least, need some 'rainy-day money' in case the kitchen appliances start dying on you. This need comes before 'leaving something'.... Or at least, the grandparents used to want to have 'enough to bury me with' - this even comes before 'the children's inheritance'!

Thinking of the children's inheritance when they haven't got a bean! People are bothered about an inheritance nowadays, aren't they? It's something that has only popped up in recent years. My DH and I never inherited a penny-piece and didn't expect to.

Aunty Margaret

cattie

I agree with you margaret. What I think is sad about a lot of people such as my friend, who has always been hopeless with money & constantly in debt, is that her children, who are all adults now, have grown up exactly the same. I guess her dream is to have her children in the position she has never been in, having at least a little bit of money left in the current account at the end of each month. And from a mother's point of view I do understand the need to want your children to have a secure future.

I'm so thankful I grew up to be reasonably astute financially & if I pop off before my friend does, at least her account will be in the black for a short while!

margaretclare

cattie wrote:

I agree with you margaret. What I think is sad about a lot of people such as my friend, who has always been hopeless with money & constantly in debt, is that her children, who are all adults now, have grown up exactly the same. I guess her dream is to have her children in the position she has never been in, having at least a little bit of money left in the current account at the end of each month. And from a mother's point of view I do understand the need to want your children to have a secure future.

I'm so thankful I grew up to be reasonably astute financially & if I pop off before my friend does, at least her account will be in the black for a short while!

Hi Cattie

It's not too late for your friend to learn. Buy her a copy of Martin's book (or get it from the library!) Another book which is extremely useful for any woman from age 9 to 90, is 'A Girl's Best Friend is her Money' by Jane Mack and Jasmine Birtles.

One of the most useful lessons I learned was from my DH soon after we started living together. It was 'It's useless having money in savings if you're in debt, because what you're gaining in interest on the savings is less than you're paying out in interest, charges etc, on the debts'. Just that simple idea was a mini-lightbulb moment for me.

In those dark years of the early 1990s when I hadn't a proper job, was scratching around for a living, I had savings accounts with the bank, for the grandkids. And sometimes when my overdraft went way over limit, the bank would raid those accounts!

A personal accounting system like Quicken has also been of enormous help to me. One year I was charged a total of £700+ just in bank charges, failed direct debits, bounced cheques etc. Without Quicken I wouldn't have been able to 'see' that.

Maybe your friend could start by drawing up a budget, as advised in Martin's book. That really is the starting-point. And also, a spending diary - a little notebook in which she makes a note of everything she spends extra to the budget.

I am lucky, I know I'm lucky, but it's not rocket science, anyone can learn!

Best wishes

Aunty Margaret