Life Assurance - Reccomended Term?

comsyte

I have around 40 years until I retire, if the proposed changes to pension age go through.

If I take out £100,000 life assurance for my wife and I, over 40 years. I will be paying around £17 per month.

Would I be better, however, taking it out over say 20 years (Which would be £9.30 per month), then when it expires, re-evaluating and taking out another 20 years. Obviously at that stage I will be paying higher premiums, but equally, over 40 years of inflation, £100,000 will probably only be worth around £25,000 in todays money. Also of course, I'd be saving a fair bit of money now.

I guess what I am asking is, what is the usual convension. Take it out as early as possible, to keep the "later in life" premiums low, or if talking about such a long term, is splitting it into blocks better?

Thanks!
James

dunstonh

You take it out for the period that matches the financial need.

comsyte

Rather than in two blocks (as mentioned above), splitting the financial need into two, essentially?

dunstonh

I dont know why you need life cover. £100k isnt much so you are probably not protecting loss of income with that. So its hard to say what you should do. However, after you have worked out your financial need and the required term, you should match that with the life policy. You dont do it for extra years just in case because there is no insurable need to do so and it will cost you more in the long term.