Life Insurance

Michelle74_2

I have been reading this site to obtain information about life insurance. I was wondering if anyone could help me clarify some things in my mind?

I am married with 2 children (very young), both me and my husband are in our mid 30s. We have a mortgage; at the time this was taken out we took out a reducing cover life insurance policy to cover it. We also took out critical illness cover at the same time. We also have payment protection insurance on my husband. I need to look at these to see if I am paying where I shouldn't but firstly I want to sort out providing for the kids in the event of my or my husband's death. (I don't have a lot of time to sort this out and am anxious that we get the kids provided for ASAP).

My husband has a death in service benefit which will give a decent amount but would probably not be sufficient for me to raise the children.

I am on a career break and as of a few months ago am no longer entitled to a death in service benefit. I want to take out a policy to cover this and provide extra income above that.

In addition I would like a policy which would pay out should something happen to both me and my husband so that the kids will be taken care of.

So, what I think I need is a Level Term Insurance for 20 years.

My questions are:

1. I presume we should get quotes for 2 single life policies and a joint one? We would need more cover in the event of my death due to the lack of Death In Service benefit.

2. Is it better to go to an IFA (I'm not sure how much cover we should get) or is it quite straightforward to use one of the brokers mentioned in the article on this site. I am happy working with numbers etc but am not sure about the different types of policies and their relative merits.

3. Who should the funds go to? I am in Scotland so not sure if the trust rules are the same here? Also if my husband died I would want the money to come to me and vice versa if I died but if we both died I would want some to go to the kids and some to go to their guardian. Can that be done?

4. Should we also take out whole of life policies now or should that not be done until after the 20 years? We would want some income in the event of either of our deaths even when they kids are no longer dependent.

I hope all the above makes sense. I apologise for A. asking these questions if they are stupid ones and B. for my first post on a new forum to me being a question!

Thanks in Advance for any help at all.

dunstonh

1. I presume we should get quotes for 2 single life policies and a joint one? We would need more cover in the event of my death due to the lack of Death In Service benefit.

As your financial needs are likely to be different to each other then 2 or 3 plans are likely to be a better option than one joint life plan. However, it really depends on how far apart your financial needs are and the cost difference.

2. Is it better to go to an IFA (I'm not sure how much cover we should get) or is it quite straightforward to use one of the brokers mentioned in the article on this site. I am happy working with numbers etc but am not sure about the different types of policies and their relative merits.

The brokers mentioned on this site are actually IFAs (although a couple are authorised only for protection only). However, the difference is that the ones mentioned on this site will not give advice. They are working on direct offer/execution only basis. You pick the providers, the level of cover, the type of life policy, options, trust forms etc. Not the IFA.

If you use an IFA for advice, they will do all of that but the premiums will be higher or you can do it on fee basis where you will probably get lower premiums than the discount brokers but pay a fee in advance.

4. Should we also take out whole of life policies now or should that not be done until after the 20 years?

Why do you think you need a whole of life plan?

We would want some income in the event of either of our deaths even when they kids are no longer dependent.

Thats what your pensions are for.