Level Term Life Insurance Guide Discussion

weighty1_2

Hi Zania,

PruProtect do offer whole of life policies and the premiums on them are extremely good value for money at the moment. However, it is a medically underwritten policy which means you have to answer a whole raft of health questions. Since the standard over 50's policies don't ask any health questions they offer far lower levels of cover for the same premium.

If you are in good health and can obtain the standard premiums I'd suggest it will be far better value for money than the AXA Sunlife, LV= over 50's plans etc. I've actually just run a quote on my system and it's actually possible to get £20,000 cover for just under £28/month with PruProtect essentials option.

dunstonh

I searched on confused.com last night for 50+ insurance (to cover funeral costs) as my term life policy expires next year.

These over 50s plans are generally an option of last resort as they are such poor value for money for most people. Why do you want one rather than a whole of life assurance policy?

They took my details and said policy was with pru life. I have not given bank details over as frankly I could not believe that anyone would insure/assure a 60 year old for a guaranteed £20000. Can anyone help surely there must be some catches.

Figures seem about right for that age for a whole of life assurance plan. I just did a check and 60 year old at £30pm was coming out with £22853 as sum assured. There are also a range of other options like taking out a whole of life plan but only having to pay for it in one go or monthly over a defined period.

You need to remember that quote comparison sites tend to offer poor value on higher regulated products compared to what an IFA can get. They are fine on car insurance and sometimes house insurance (IFAs can sometimes beat comparison sites). You should ask a local IFA.

Muzzy23

dunstonh wrote: »

It's straightforward. Just choose the trust type you want and complete the forms for it. It's only if the insurer doesnt have the trust type you want that it gets more complicated.

Hi dunstonh

Many thanks for the advice, much appreciated

pete1976

Quick question (I hope). Martin's article says you need to put a policy in trust at the time it's taken out. However, I note on the Legal & General website it says that existing policies can be put into trust and not just new ones.

(Quote from http://www.legalandgeneral.com/life-cover/existing-customers/trust-information/ - "You can place new and existing policies in trust")

What's the truth? Or does it depend on the provider?

Many thanks.

kingstreet

I wouldn't say it's possible to write every existing policy in trust, but it's a lot easier now than it was when I entered the industry in the mid-80s.

If you are taking out new cover, do it now because chances are, if you don't it'll never get done.

dunstonh

pete1976 wrote: »

Quick question (I hope). Martin's article says you need to put a policy in trust at the time it's taken out. However, I note on the Legal & General website it says that existing policies can be put into trust and not just new ones.

(Quote from http://www.legalandgeneral.com/life-cover/existing-customers/trust-information/ - "You can place new and existing policies in trust")

What's the truth? Or does it depend on the provider?

Many thanks.

It depends on the life assurance company. Some allow it, some don't. It may also depend on the type of trust being used. Remember that MSE articles are not always accurate and are often dumbed down, simplified or carry a majority method rather than all options or variables.

josharan

I need to update my life insurance to cover the financial needs of my three children until the youngest is 20 years old (approx 15 years). I have a policy with legal and general that I got through an 'independent' advisor. My bank offered advice from an advisor who says she is independent, though she is clearly employed by the bank and appears to be promoting products of the bank. She was actually quite thorough and did a budget for us to see what we could afford. I also checked out quotes from another advisor and the online sites provided on money saving expert. The online sites came out about 50% cheaper but when I challenged the advisor on the cost of policies she claimed that the Scottish Widows policies that she was selling were 'underwritten' when the policy was drawn up and in practice this is a guarantee that the policies will pay up. She claimed that the likes Aviva and legal and general and Bright Grey were not guaranteed to pay and she cited the experience of one customer that was refused payment because he was diagnosed with cancer but failed to attend one of his medicals. Are life assurance products reliable or not? I don't know who to believe.

kingstreet

josharan - this bank adviser is misrepresenting the truth to make her product look good.

Provided you are truthful in the answers you give, provide any additional information requested and pay the premiums, you should have no problems getting a payout from a life policy.

Scottish Widows is the captive/tied life company of the Lloyds Banking Group. Typically, the cost of cover taken out through a bank adviser will be a lot higher than you can get from an IFA or online. You should also take professional advice on writing the plans in trust. I'd be surprised if your typical bank adviser suggested that?

By using a trust you;-

- ensure the money goes to who you want it to
- avoid inheritance tax as the money does not enter your estate
- avoid probate and ensure the funds are paid quickly to those who need them.

An IFA should be able to get you cheaper cover and give you the right trust advice. Ask friends and relatives for a recommendation. Failing that, try https://www.unbiased.co.uk.

josharan

Thanks that is a really helpful reply Kingstreet.

dunstonh

My bank offered advice from an advisor who says she is independent, though she is clearly employed by the bank and appears to be promoting products of the bank.

Make a complaint straight away. You may even get paid £25-£50 by the bank for doing so. Misrepresentation by the banks is rife. Research has found that over half of people seeing tied sales reps though they were seeing an IFA.

The online sites came out about 50% cheaper but when I challenged the advisor on the cost of policies she claimed that the Scottish Widows policies that she was selling were 'underwritten' when the policy was drawn up and in practice this is a guarantee that the policies will pay up.

SW products sold via the LTSB sales reps were about 30-40% higher in cost than the life cover arranged via an IFA. So, 50% on a quote comparison site is about right.

She claimed that the likes Aviva and legal and general and Bright Grey were not guaranteed to pay and she cited the experience of one customer that was refused payment because he was diagnosed with cancer but failed to attend one of his medicals.

Another couple of rule breaches. Tied sales reps are not allowed to discuss the products and services of other providers positively or negatively. Indeed, they are only allowed to stick to factual information. I doubt a sales rep has any experience of claims on providers they are not authorised to use themselves (and why would they?)

Are life assurance products reliable or not? I don't know who to believe.

Yes they are reliable. You have just seen the worst side of banks and the advice they give. You really ought to complain. Just copy and paste what you have said here (and tweak it a little for complaint reasons). Lloyds will normally take it seriously and will often pay you a small goodwill payment. So, your time wont be wasted and it will also help others who are being ripped off by this unscrupulous sales rep.