Life Insurance or Life Assurance or Level Term Assurance????

mbabic1

Someone please HELP!!!!

I am 29 years old, married, home owner and pregnant with twins.

Both my husband and I feel that it's time we take out some sort of policy which will cover us both and our children in the event that something was to happen to either of us, i.e. if one of us was to die. We would like to have a cover so that if one of us was to die the other one and the children would be taken care of.

There are so many different assurances and insurances around at the moment that frankly we're not quite sure which one to go for for what we need.

Do we go for life assurance, level term assurance, life insurance or something else?

I would very much appreciate it if someone can advise us as to which policy we should be going for?

Keep in mind that I will be off work very soon for at least a year.

I look forward to your advise on this matter.

Many thanks

Maria

dunstonh

Life assurance is the product class.

The products within that class (in the mainstream as I am not going to list them all) are Level Term Assurance, Pension Term Assurance and Family Income Benefit.

FIB is cheapest, followed by PTA and then lastly LTA.

Which you go for is your choice depending on your budget and how you want the life assurance to be paid (i.e. if the life assurance needs to be in trust to avoid Inheritance tax).

mbabic1

Sorry but I'm now even more confused as you mentioned some other policies on offer to us.

What is the difference between FIB, PTA, LTA, Life Insurance and Life Assurance?

There are so many around and no explanation for them all and it's really difficult to know which one to go for.

My requirement is a policy that in the event of either myself of my husband dying, will financially take care of the other and the children in respect of outstanding mortgage and lump sum of money?

Thanks
Maria

Bernard_Coleslaw

Life insurance and life assurance are the same thing (technically, assurance is the correct name). What dunstonh was mentioning was the various types of life assurance out there.

Term assurance simply runs for a fixed period of time and will pay out a lump sum in the event of death. With level term assurance, the amount of cover stays the same throughout the term, with decreasing term assurance, the amount of cover decreases (in line with a reducing repayment mortgage balance, for instance).

Pension term assurance is similar, however in some cases the cost may be cheaper as you can get tax relief on premiums, however I am not an expert on this so please take advice!

Family income benefit doesn't pay a lump sum on death, rather it pays a regular income to your dependents instead.

As you can see, there is a range of solutions. Your best bet is to seek advice (preferably independent) to see which would work best for you.

And good luck with the twins!

BC

mbabic1

Bernard_Coleslaw wrote:

Life insurance and life assurance are the same thing (technically, assurance is the correct name). What dunstonh was mentioning was the various types of life assurance out there.

Term assurance simply runs for a fixed period of time and will pay out a lump sum in the event of death. With level term assurance, the amount of cover stays the same throughout the term, with decreasing term assurance, the amount of cover decreases (in line with a reducing repayment mortgage balance, for instance).

Pension term assurance is similar, however in some cases the cost may be cheaper as you can get tax relief on premiums, however I am not an expert on this so please take advice!

Family income benefit doesn't pay a lump sum on death, rather it pays a regular income to your dependents instead.

As you can see, there is a range of solutions. Your best bet is to seek advice (preferably independent) to see which would work best for you.

And good luck with the twins!

BC

Cheers for that Bernard,

That's made it easier to understand and to eliminate at least a couple of them.

What is the best way of finding a genuine, reliable, IFA that wont rip you off?

Thanks again

Maria

Bernard_Coleslaw

Maria

There's a number of ways of getting advice.

Click here for one of Martin's posts, which talks about Term Assurance in more detail. About two-thirds of the way down is a section on getting advice.

I've not tried this link - it does link to a searchable database of IFAs but I'm not sure it's a complete list.

The key thing is to make sure someone actually looks at your particular circumstances and takes time to come up with a recommendation that suits you and your family. Don't worry about asking as many questions as you want - it's the advisor's job to explain things to you.

Some advisors may charge you a fee, whilst others will take commission from any policies they sell you. Depending on what you take, either option may work for you.

Cheers

BC

dunstonh

It should be noted that Martin's term assurance article is out of date due to the reintroduction of pension term assurance from 6th April.

unbiased.co.uk covers around 90% of IFAs in the UK. Ignore the filtering on qualifications though. Its massively flawed due to the wide range available which overlap and would eliminate advisors perfectly able to give you advice.

Bernard_Coleslaw

Thanks for the heads up, dunstonh.

I'm always nervous about how to recommend finding a broker, as there are so many ways of getting advice.

Plus I wouldn't want to annoy any of the people in the industry (like yourself) who spend so much of their spare time on here helping us amateurs!

BC